EU implosion, update #4

WaPo's Robert Samuelson describes in a June 15 article how the term "Old Europe" is developing a more ominous meaning:

The End of Europe

Europe as we know it is slowly going out of business. Since French and Dutch voters rejected the proposed constitution of the European Union, we've heard countless theories as to why: the unreality of trying to forge 25 E.U. countries into a United States of Europe; fear of ceding excessive power to Brussels, the E.U. capital; and an irrational backlash against globalization. Whatever their truth, these theories miss a larger reality: Unless Europe reverses two trends -- low birthrates and meager economic growth -- it faces a bleak future of rising domestic discontent and falling global power. Actually, that future has already arrived.

Ever since 1498, after Vasco da Gama rounded the Cape of Good Hope and opened trade to the Far East, Europe has shaped global history, for good and ill. It settled North and South America, invented modern science, led the Industrial Revolution, oversaw the slave trade, created huge colonial empires, and unleashed the world's two most destructive wars. This pivotal Europe is now vanishing -- and not merely because it's overshadowed by Asia and the United States.

It's hard to be a great power if your population is shriveling. Europe's birthrates have dropped well below the replacement rate of 2.1 children for each woman of childbearing age. For Western Europe as a whole, the rate is 1.5. It's 1.4 in Germany and 1.3 in Italy. In a century -- if these rates continue -- there won't be many Germans in Germany or Italians in Italy. Even assuming some increase in birthrates and continued immigration, Western Europe's population grows dramatically grayer, projects the U.S. Census Bureau. Now about one-sixth of the population is 65 and older. By 2030 that would be one-fourth, and by 2050 almost one-third.

No one knows how well modern economies will perform with so many elderly people, heavily dependent on government benefits (read: higher taxes). But Europe's economy is already faltering. In the 1970s annual growth for the 12 countries now using the euro averaged almost 3 percent; from 2001 to 2004 the annual average was 1.2 percent. In 1974 those countries had unemployment of 2.4 percent; in 2004 the rate was 8.9 percent.

Wherever they look, Western Europeans feel their way of life threatened. One solution to low birthrates is higher immigration. But many Europeans don't like the immigrants they have -- often Muslim from North Africa -- and don't want more. One way to revive economic growth would be to reduce social benefits, taxes and regulations. But that would imperil Europe's "social model," which supposedly blends capitalism's efficiency and socialism's compassion.

Read on. It's like watching a train wreck in slow motion— you're fully aware of the impending doom for the train passengers, but all you can do is look on in helpless fascination.

Right Mind takes a look at how the US is doing in comparison.


All "EU implosion update" posts