Europe Faces Looming Demographic Crisis

A Bruegel report highlights the impending demographic crisis in Europe due to a declining working-age population. The European Union is set to discuss it, focusing on immigration and family support as potential remedies. The report underscores the strain this will place on welfare and public finances.

Europe is on the brink of a demographic crisis, with a significant decline in its working-age population expected to strain welfare systems and public finances in the coming decades. This alarming forecast is central to an impending EU discussion on the demographic timebomb.

The report from Bruegel highlights that as Europe's population ages, the number of individuals working and paying taxes will drop, while the demand for pensions and healthcare rises. Facing resistance to increased immigration, the EU must consider alternative solutions, such as enhancing family support to boost fertility rates and increasing labor force participation.

Hungary, the current EU presidency holder, opposes increased immigration, suggesting family support and labor force participation as solutions. The Bruegel report predicts that without net immigration, the 20-64 age group will shrink by a fifth by 2050. Even a modest increase in immigration would not fully counterbalance this decline. As the EU finalizes debt reduction negotiations, demographic management remains a critical issue.

(With inputs from agencies.)