Tuesday, May 4, 2004

Certain Europeans threw a mighty snit when Secretary of Defense Donald Rumsfeld quipped about the Germans and the French belonging to Old Europe and the new countries coming into NATO and the European Union being the New Europe.

Now, the wisecracking Mr. Rumsfeld was probably not thinking in terms of demographics, but he did hit the nail on the head as regards Europe’s population growth. Europe’s population is aging and shrinking fast. For those who have found Europeans to be hostile, nagging and anti-American in recent years, this may of course not be the worst news in the world.

Yet, there is no denying that it is a real problem, with repercussions beyond Europe’s borders. Before long, declining demographic trends will place expensive and severe strains on the European economies, particularly on its health care and social systems.Furthermore, additional ethnic tensions will result from increased immigration and higher birthrates among predominantly Muslim immigrant populations. This issue bleeds into international relations, as we recently have experienced over the opposition of many Europeans to U.S. policy on Iraq and the Middle East.

Consider a statistic published in The Washington Times a few weeks back. One hundred years ago, Europe had 14 percent of the world’s population. Today it has 6 percent. By the year 2050, it will have a mere 4 percent. While a few countries are holding steady, Britain primarily, others are seeing dramatic decline. Nor will the 10 new member countries reverse this trend. According to U.N. numbers, by 2050, the number of Italians may have fallen from 57.5 million in 2000 to 45 million. The Spanish population will have been reduced from 40 million to 37 million.

Or consider Germany, a country with one of the lowest fertility rates in Europe. According to projections by Deutsche Bank, even with immigration at 250,000 a year, the German population will decline from 80 million to 50 million by the end of this century. By 2050, the greatest proportion of the German population will be over 55 years of age. In German cities like Cologne, where today 25 percent to 40 percent of the population is of foreign descent, more than half of the population will be of a foreign background by 2030.

Europeans have been in a state of denial about these facts, which are deeply controversial politically. They are only now, ever so gingerly, coming around to discussing the subject of the continent’s collapsing birthrate.

At a recent meeting in Venice of the Council for the United States and Italy, demographic trends were the subject of an unusually open debate. One speaker asked the pertinent question, “Who is going to invest in an aging and shrinking society?” Solutions to the European conundrum could be integrating immigrants better, increasing the retirement age, cutting pensions and having more children. Yet, all of these are third-rail issues for European politicians.

In the past few years, governments in France, Germany, Spain and Italy have all attempted pension reform and run into outbreaks of labor unrest as a consequence. Europeans, who love their long vacations, also look forward to early retirements. And incentives by the state to bring more children into the world, a path taken by Sweden and France, may work for a while, but are generally regarded as suspiciously authoritarian and paternalistic. With high unemployment rates, young Europeans put off starting families until they are financially secure. After that, an insistence on perfect gender equality makes women less likely to “put up with” raising large families.

Despite the fact that Social Security reform is a political hot potato in Washington as well as in the capitals of Europe, the United States faces much less of a problem. The United States has a relatively high fertility rate, above replacement. It accepts and assimilates more immigrants — 700,000 a year. And, this country has greater numbers of older workers in the work force and fewer public benefits. All of which in the long run adds up to a less generous, but more viable, social system than those of Europe.

The greatest problem for the European Union will not be social integration after enlargement, but how to reform pension systems to provide for an ever-older population. The European Union’s enlargement to 25 nations was greeted with great fanfare all through the continent last week, but it is hard to imagine Europe experiencing a real renaissance — as many Europeans hope it will — in view of its declining populations. Unless attitudes and behavior change dramatically, the Europeans face “a slow but inexorable ‘exit from history,’ ” as a report by the French Institute for Foreign Relations stated a few years ago. How very European to put it that way.

Helle Dale is director of Foreign Policy and Defense Studies at the Heritage Foundation. E-mail: helle.dale@heritage.org.

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