by Patrick J. Buchanan
As Greece lurches on the precipice
of default on its sovereign debt, a default that could bring down banks across
Europe and precipitate a global financial panic, a consensus is building that
there is but one way out.
First, a structured default on the Greek
debt, giving creditors a major haircut, but compensating them with eurobonds of
half the face value of the Greek bonds, guaranteed by the European Central
Bank.
Second, a huge new European
Financial Stabilization Facility of trillions of euros to recapitalize stricken
banks and buy up the sovereign debt of Portugal, Italy, Ireland and Spain,
should private investors flee their bonds.
Such a solution, however, depends
upon Germany, the richest nation in Europe and major contributor to the ECB.
Hard-money Germans, however, do not
relish bailing out the deadbeat nations of Club Med who have more generous
welfare states than their own.
Politically, it may not be possible
to cajole or coerce the Germans, indefinitely, into saving the eurozone, the
collapse of which could bring on a depression and bring down the European Union
itself.
There is another reason the European
Monetary Union and EU may be headed for the boneyard: demography.
Looking over the 2008 World
Population Prospects from the United Nations’ Department of Economic and Social
Affairs, one finds that the nation which is to carry Europe back to solvency is
aging, shrinking and dying.
Every decade of this century,
Germany will become less able to sustain its dynamism, let alone carry the
continent.
Consider. In 2010, there were 82
million Germans. Fully 26 percent were 60 years of age or older; 20 percent
were 65 or older; 5 percent were 80 or older.
Now, fast forward to 2050.
Between 2010 and mid-century, 12
million Germans will disappear. In 2050, Germany will be a nation of 70
million, whose median age will have risen from 44 today to 51. And the life
expectancy of all Germans will rise from today’s 80 years to 84.
The average German may enjoy four
more years of life, but he or she will also require four more years of social
security and health care provided by the taxpaying public. And that taxpaying
public is also going to shrink.
By 2050, the percentage of Germans
over 60 will have risen from 26 to nearly 40 percent. The percentage 65 and
over will have risen from 20.5 to 32.5 percent, and the share over 80 will have
tripled from the present 5 percent of the population to 14 percent.
By 2050, one in three Germans will
be 65 or over, and one in seven will be 80 or over. That is a lot of old-timers
for working Germans, whose numbers and share of the population will have been
dramatically reduced, to support.
Moreover, the percentage of German
women in the childbearing ages of 15 to 49 will have fallen from today’s 45
percent to 34 percent, guaranteeing a continuous decline in the German
population for the rest of the century.
There is not a single year between
1970 and 2050 where Germany’s birth rate even approaches the replacement level
of 2.1 children per woman. By mid-century, Germany will have been below zero
population growth for 80 years. This is a nation slowly taking its leave of
this world.
For Club Med to be rescued, the
shrinking German labor force will have to carry an ever-expanding cohort of
German retirees and aged, as well as growing numbers of retired and aged of the
debt-ridden south of Europe.
Consider the nation closet to
default: Greece.
In 1950, nearly half of Greece’s
population was 24 or younger. In 2050, less than one-fourth of all Greeks will
be 24 or younger.
Today, one-fourth of all Greeks are
60 or older. But in 2050, it will be nearly 38 percent. Less than 4 percent of
Greeks are 80 or over today. By 2050, that will have tripled to almost 11
percent.
Italy, a country of 60 million, is
on schedule to lose 3 million people by 2050. The share of Italy’s population
65 or over will go from one-fifth today to one-third by mid-century.
Italians over 80 will double from 6
percent today to 13 percent in 2050. Life expectancy will rise by four years to
close to 86.
Across Europe, not one nation has a
birth rate sufficient to replace its native-born population. The share that is
of working age is shriveling, while the share that is eligible for state-funded
pensions, social security and health care is growing.
And it is the Germans who are
leading Europe into retirement centers, assisted living facilities and nursing
homes.
Europe needs more young workers to
maintain the dynamism of the continent and make good on all promises made to
her people.
To the south, the exploding Muslim
populations of the Maghreb and the Middle East appear ready to come and help
out.
“This is the way the world ends/Not
with a bang but a whimper.”
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