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Demography is Destiny

The demographic aspect of Germany’s European dominance

The demographic aspect of Germany’s European dominance

by | June 07, 2019

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The future of Europe and the EU will be fascinating to watch in the years ahead. There are so many questions that need to be answered: when will Britain leave the EU? (Will it actually leave the EU? I can imagine it asking for another extension in 2032…) What will happen when the next financial crisis hits? Who will take up the financial slack if Britain does actually leave? Will Macron dreams of closer European integration be realised? Will Merkel ever step down? If so, what will the next German leader’s views of Europe be?

The European elections recently saw a decline of the centrist party groupings in the European elections and a rise in the “fringes”: the green parties and the various populist, nationalist parties. Although many of these parties have gained traction on (both sides of) the migration issue, this was mostly about outsiders coming into Europe. There is another migration issue that has got less traction (although we have obliquely discussed it on this blog before!) and that is the intra-EU migration that comes along with the free movement of peoples. This migration is not evenly spread throughout the continent and it tends to be for the benefit of the richer nations (mainly Germany) at the expense of the poorer ones.

As this piece notes, many Eastern European nations have lost vast numbers of their young, educated workers to the west and, in particular, to Germany. In the past couple of decades, 20 per cent of Romanians, 12 per cent of Bulgarians and seven per cent of Poles have left to work in other European nations, according to Eurostat. Thousands of people from the East left for greener pastures after the fall of the Berlin Wall but the western migration took on a new dimension after the financial crisis of 2008 and the debt crisis of 2011. From the South too, hundreds of thousands of workers have left economically weak Portugal, Spain, Greece and Italy. Since 2008 two million young Italians have left, while five per cent of Portugal’s population has left in the last decade.  These movements are mainly comprised of young and educated migrants whose departure leave a massive demographic hole in their home countries. Their leaving reduces the size of their home’s working population and reduces its productivity. The age of those leaving has a further deleterious demographic effect: they are not staying to have the next generation at home and providing future workers and taxpayers. This is particularly damaging at a time when European nations’ birth rates are so low and the population across the continent is ageing. Who will pay for the future healthcare and pensions of Romania? Or Portugal?

Where do these migrants go? Vast numbers go to Germany: in the last ten years, Germany has welcomed 2.7 million European citizens. These are part of the migration wave that is keeping Germany’s demographic position stable despite its very low birthrate. Furthermore, these European migrants, because they are largely already educated by their home countries, constitute a large transfer of wealth (to the tune of 200 billion euros between 2009 and 2017) from the poorer Southern and Eastern European countries to the German economy. Germany is not only the major beneficiary of the monetary union (just ask Greece or Cyprus) but it is also attracting large numbers of productive people from countries that are struggling with weak economies and demographic decline (in Romania’s case, steep decline). Maybe Germany really is too large for Europe and too small for the world.

Marcus Roberts is co-editor of Demography is Destiny, MercatorNet's blog on population issues.

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