Tags: Germany | Europe | demographic | population

European Commission Report: German Leadership of Europe Will End

By    |   Friday, 21 June 2013 07:59 AM

It's all over for Germany.

Well, not exactly. But at least its hegemony over Europe will be ending over the coming decades.

Blame demographics.

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Put the World’s Top Financial Minds to Work for You


According to the European Commission’s 2012 Ageing Report, Germany's population will drop from 82 million in 2010 to 66 million in 2060, dropping from the first to third most populous European Union country.

Germany's population will decline 19 percent by 2060, one of the sharpest drops of any EU nation. By comparison, the United Kingdom's population will increase 27 percent.

The demographic call for "large revisions in potential growth prospects," the report notes.

"Germany is at the high point of its economic output. It will not get any stronger," Guenther Oettinger, Germany's EU commissioner, told The Telegraph, lamenting that his country is obsessed with "welfare benefits, female quotas, the minimum wage and 'no' to shale fracking."

In addition, Germany will have a growing number of elderly.

Germany could become "the sick man of Europe again in five to 10 years" unless it can improve its education and infrastructure, warned Jorg Asmussen, Germany's representative at the European Central Bank, The Telegraph noted.

According to the widely held conventional view, Germany revitalized itself with labor market reforms over the last decade. But that's not entirely true, according to The Telegraph. Although reforms limited pay increases, they also increased income inequality. The country remains plagued by inefficiency, weak productivity growth and strict business regulations. Plus, its decision to drop nuclear power may cause energy costs to skyrocket.

"Germany is much more vulnerable than German policymakers appear to believe," Simon Tilford of the Center for European Reform told The Telegraph. "Its economic and political ascendancy will be short-lived."

"Germany is dying," writes geographer Jim Russell for the Pacific Standard, noting its falling population. Only Japan suffers from worse demographics.

German companies need skilled workers, but the country has historically had an uncomfortable relationship with immigrants, as Germany has never considered itself an immigrant country.

Large numbers of foreign workers from southern Europe and Turkey entered the country in the 1950s and 1960s. Known as guest workers, they were expected to be temporary residents but many ended up settling there. While those guest workers were generally low skilled, new immigrant workers fleeing the eurozone crises are well educated.

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It's all over for Germany. Well, not exactly. But at least its hegemony over Europe will be ending over the coming decades.
Germany,Europe,demographic,population
401
2013-59-21
Friday, 21 June 2013 07:59 AM
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