The labor demonstrators, now an almost-daily occurrence in Madrid and other economically-devastated southern European cities lambast austerity and budget cuts as the primary cause for their current national crisis. But longer-term, the biggest threat to the European Union has less to do with government policy than what is–or is not–happening in the bedroom.
In particular, southern Europe’s economic disaster is both reflected — and is largely caused by — a demographic decline that, if not soon reversed, all but guarantees the continent’s continued slide.
For decades, the wealthier countries of the northern countries — notably Germany — have offset very low fertility rates and declining domestic demand by attracting migrants from other countries, notably from eastern and southern Europe, and building highly productive export oriented economies.
In contrast, the so-called Club Med Countries– Greece, Italy, Portugal and Spain–have not developed strong economies to compensate for their fading demographics outside pockets of relative prosperity such as Milan. Spain was once one of Europe’s star performers, buoyed largely by real estate speculation and growing integration with the rest of the EU. Six years ago the country was building upwards of 50% as many houses as the US while having 85% less population. Roughly six million immigrants came to work in the boom, even as roughly seven to eight percent of Spaniards preferred to remain unemployment.