Ever?
Of course, if one included the whole trading bloc of North America (NAFTA),
Europe's numbers aren't so impressive/overwhelming.
"If current forecasts prove correct, then the US - which currently has 160m fewer people than
the EU - will have equaled it by 2050."
http://news.bbc.co.uk/1/hi/world/europe/4768644.stm
Birth rates in the European Union are falling fast.
Europe's working-age population is shrinking as fertility rates decline. In a fit of gloom, one
German minister recently warned of the country "turning the light out" if its birth rate did
not pick up.
With fewer, younger workers to pay the health and pension bills of an elderly population,
states face an unprecedented fiscal burden.
The dependency ratio of those aged 65 and over to those of working age looks set to double from
one-to-four to one-to-two in 2050.
How can Europe, which increasingly sees itself as a counterweight to US hegemony, claim equal
status when it is being outpaced by American population growth?
If current forecasts prove correct, then the US - which currently has 160m fewer people than
the EU - will have equaled it by 2050.
http://www.cbsnews.com/stories/2003/03/27/world/main546441.shtml
European Birth Rate Declines
Population Growth In E.U. Has Flipped From Positive To Negative
http://www.theage.com.au/articles/2004/04/30/1083224580762.html?from=storyrhs
Economists warn that Europe is in danger of becoming a backwater if labour market reforms are
not achieved. Tim Colebatch reports.
Thirty years ago, the European Union produced 25 per cent of the world's output. Today, it
produces 18 per cent. And on current trends, EU economic modellers estimate, by 2050 its share
of the world economy will shrink to just 10 per cent.
As you read this, bells will be ringing throughout Europe to celebrate 10 countries joining the
Union today. Poland, the Czech Republic, Hungary and seven others will increase the world's
largest common market to 25 countries, more than 450 million people, and a real GDP almost 15
per cent bigger than that of the United States.
But Europe's lead will not last. Its own researchers in Brussels are warning that without
radical reforms, it risks becoming a backwater in a global economy, while the action is
elsewhere: in the US, and the developing countries that will see far greater growth in
working-age population.
Its central problem is very low fertility. Between them, every two Europeans on average now
create 1.5 children. By 2050 this will create a Europe with 12 million fewer children, 41
million fewer workers, but 41 million more retirees. By contrast, in the US, higher fertility
rates coupled with high immigration will expand the potential workforce by 60 million, and lead
to startling differences in growth between what are now the two dominant entities in the world
economy - with huge implications for financial markets.
Between 1950 and 2000, according to a new book by EU economists Kieran McMorrow and Werner
Roeger, Europe and the US grew on average by similar rates, and in both, the size of the
economy grew four or five times over. But while Europe outgrew the US in the century's third
quarter, in the final quarter it was the US that pulled away, as demographic trends drove
investment out of the old continent, into the new.
And in the half-century ahead, without reforms in Europe, their paths will diverge completely.
The US economy would grow to three or four times its present size, and expand its share of the
world economy. But Europe's output would not even double in size, while Japan's output would
grow by barely 50 per cent.
A shrinking workforce is the most obvious problem. Less obvious is the impact on investment.
With fewer people and little growth, European investment would flow overseas, like Japanese
investment in the past decade. Low returns and Europe's shrinking weight in the world economy
would see its own investors put money in faster-growing regions as Europe becomes an aged
economy.
Productivity too would suffer. Less investment would mean less new equipment, reducing
productivity growth. And arguably, fewer people between 20 and 50 would mean fewer drivers of
innovation, further reducing productivity growth.
With reforms, the problems would be greatly reduced. By lifting workforce participation,
reducing structural unemployment, making pensions less generous and ultimately shifting to an
Australian-style capital-funded superannuation system, the modelling by McMorrow and Roeger
shows, European governments would lift growth rates, reduce pension costs, hold down taxes and
create an environment where European pension funds would mostly invest at home.
This scenario is widely accepted by European leaders, who in Lisbon four years ago adopted a
reform agenda aimed at ending the tradition of early retirement on generous pensions, reining
in the cost of welfare, freeing up labor markets, firing up research and development and making
Europe the world leader in innovation by 2010.
But four years on the Lisbon agenda has made little progress. For the sense of crisis shared by
leaders and analysts has yet to get through to Europe's voters. In Germany and France, Poland
and Spain, voters have sharply rejected governments that have implemented reforms that reduce
pension entitlements and other welfare benefits, or require people to work longer before
retiring.
http://www.bmj.com/cgi/content/full/330/7493/692-a
Brussels
The European Union is facing unprecedented demographic change, according to the European
Commission, which is so concerned at the implications of a falling population that it has
issued a consultation paper on the subject.
The native population of the EU's 25 member countries grew by only 0.04% in 2003, and of the 10
countries that joined the EU last year, all except Cyprus and Malta saw their populations
decline. Across the EU the fertility rate is below the threshold needed to renew the population
(around 2.1 children per woman), and in 16 countries it has fallen below 1.5. This contrasts
with the situation in 1960, when the average fertility rate of the EU's current 25 members was
just over 2.5 children and only Hungary and Latvia were below the renewal threshold.
The consultation paper indicates that the EU's current population of 458 million people will
grow by just 2% by 2025-and only because of immigration-and thereafter will start to decline.
In contrast the number of people living in the United States is set to increase by 26% over the
next two decades.
