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Europe Needs More Nursing Homes than Nursery Schools – the Pope Was Right

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Susan E. Wills - published on 12/02/14 - updated on 06/07/17

Europe's coming demographic collapse could spell financial ruin

In his address last week to the European Parliament, Pope Francis provoked something of an uproar in twice describing Europe in unflattering terms: “Europe seems to give the impression of being somewhat elderly and haggard,” the “impression of weariness and aging, of a Europe which is now a ‘grandmother,’ no longer fertile and vibrant.”

Commentators took umbrage, but few took a look under the hood of Europe’s economic engine.   

And one British columnist announced that she was no longer a "fan" of Francis, having been deeply offended specifically by the “grandmother” analogy. In hindsight, perhaps it may have been wiser to use a gender-neutral term. Grandmothers can and do make unique and vital contributions to their families, communities, church and society. Two grandmothers – Margaret Thatcher and Angela Merkel (ok, a step-gram) – are arguably Europe’s most formidable and consequential leaders of the post-Cold War era.

But if adjectives like elderly, haggard, weary, “no longer … vibrant” don’t apply to today’s grandmas, the terms very accurately describe the modern European Union (EU).

Yes, it’s arguably the world’s "biggest economy," according to the International Monetary Fund (IMF): the EU’s gross domestic product (GDP) is $16.77 trillion, ahead of the U.S. GDP of $16.768 trillion. But, sadly, the size of the European economy is due not to a strong and growing private sector, but to increased government spending, financed by borrowing that is already necessary to support Western Europe’s generous public retirement systems.  

Writing last week in the “Financial Times,” Franz Schellhorn explained that Austria – the EU’s “Wunder economy” with its second highest income per capita and second-lowest unemployment rate – is not actually very wunderbar after all. Unemployment is low because older people who’d like to continue working are sent into retirement at the average age of 58.5 years. Austria’s annual deficit from the public retirement system alone is10 billion Euros.

Austrian workers – even those earning low wages – already must fork over half their salaries in taxes to the government to help fund social welfare benefits and the growing interest burden on Austria’s debt. Productivity is dropping and the current trajectory – the increasing number of retirees relative to working-age people and the increasing public deficits and debt – will sooner or later spell disaster for Austria. Similar stories have played, or will play, out throughout the EU in the coming decades.

Austerity measures can only postpone the inevitable economic collapse that occurs when a nation’s productivity falls too low (due to fewer people in the workforce, for example) to support increasing numbers of people dependent on government benefits. This situation occurs when (1) people live longer due to improved nutrition, hygiene and healthcare, and (2) fewer children are born due to the widespread use of contraception, the availability of abortion, later marriages and the devaluation of children.

Although Schellhorn failed to raise the crucial issue of Austria’s abysmal Total Fertility Rate (TFR) – 1.44 lifetime children per woman in 2012 (down from 2.69 in 1960) – “Forbes” contributor Joel Kotkin did so, in his article on the declining economic fortunes of “Mediterranean” EU countries: “It’s the Birth Rates, Stupid!”

Committing demographic suicide

Kotkin quotes the author of "Spain’s Demographic Suicide," Alejandro McCarrón Larumbe, about the dropping fertility rates. McCarrón states that "today’s decline is almost all about a decline in values":

Priorities for most young and middle-aged women (and men) are career, building wealth, buying a house, having fun, travelling, not incurring in the burden of many children.

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