The cafe-lined streets of Paris and the picturesque, sun-struck streets of Barcelona are picture-perfect, idyllic locations to most people – but behind the tourist facade there are a legion of young people clamouring to escape.
Europe’s financial crisis has reached the point where young people are desperate enough to look at places like Africa as emigration destinations. They see Europe as having no future – they see themselves as having no hope for a decent life, as their parents most certainly had, if they stay.
Young people all across Europe are clamouring to escape from places like France, Spain and Portugal. But why are so many young Europeans trying to escape, and where they are going?
The situation is particularly bad in Southern Europe, where in Italy, more than a quarter (28%) of Italians between 16 and 24 are unemployed, and in Greece, (and this figure will blow your mind), 62.5 percent of its young people are out of a job. That’s well over half of all people under the age of people under 24 who can’t find work.
Worse still, the rate is steadily increasing; by 2014, the youth unemployment figure in Greece is expected to be 70%. Quite ridiculous numbers indeed.
In Spain, once a bastion of productivity and seen as having a very bright future around the turn of the millennium (when it first joined the European Union), within a period of less than ten years it’s gone from having a positive net migration rate (more people arriving than leaving) to having a shockingly high emigration rate (far more people leaving than arriving). And you can understand why, with youth unemployment currently sitting at 50% in Spain.
As a result, Greeks, Spaniards, Portuguese, and other European citizens are moving, en masse. In 2011, for example, 2,500 Greek citizens moved south to Australia and another 40,000 have “expressed interest” in making the move.
It’s not just Southern Europe, either; northern European nations such as Ireland and Wales (a part of the UK, but still) are facing similar issues with their youth, particularly qualified and skilled youth, departing for more prosperous shores across the oceans.
Ireland’s central statistics office has projected that 50,000 people will have left the country by the end of the year, many for Australia and the US.
This phenomenon is also occurring in Wales. The more skilled and educated younger people almost all leave for either higher pay in England, or further abroad in places such as the United States and Canada.
The problem is best exemplified by an open letter recently written by a 20 year old French student, known only as Clara G, addressed to French President Francois Hollande, in which she channels the sense of despair prevailing among many of her compatriots at the enormous debt burden the country has been saddled with, thanks to irresponsible and reckless bankers and successive governments who are largely at the mercy of the international banking system.
The letter is available here (although in French), but a translated excerpt of the letter is below:
“This will probably shock you, but it is mainly for fiscal reasons,… simply because I do not feel like working all my life to pay taxes, a large part of which will only service the 1.9 trillion Euros of debt that your generation has kindly left us. If these borrowings had at least been invested to prepare the future of the country, if I was getting a small benefit from them, it would not be a problem for me to help repay them. But this debt only helped your generation live above its means, and assure itself a generous social safety net which I will not have.
My labor and my taxes will also pay for your generation’s retirement which you did not bother to plan, and for all the health and support expenses incurred by the elderly who in less than twenty years will be a majority of the population. So what will be left for me to live on and to raise my children?
And, if by some improbable miracle, I managed to make a lot of money, I know already that not only will I be paying most of it in taxes, but I will also endure the general reproach of my compatriots and your personal contempt.
This is why, Mr. President, I am thinking of leaving France. And why your [government] should be less worried about the dangers of immigration and more concerned with the threats of emigration by the youth of this country. Where would I go? Perhaps to Germany, a country that you frequently disparage but which looks like a confident country. Or perhaps further, to Canada or Australia. Or to a developing country. To Africa, why not?
Yes, I want to go to a country where there is growth, where wages are rising, where being rich is not a deadly sin, a country in short where the individual and the society have confidence that tomorrow will be brighter than today.”
The Problems They Leave Behind
The real problem is for these countries is that the more young people keep leaving, the lower the chances of their economies sustaining any kind of meaningful recovery in order to repay the giant piles of debt they have accumulated.
When you look at the types of young people that are leaving; educated, often with higher degrees such as research degrees or in-demand degrees such as Engineering, Medicine and Science, wealthy (or at least financially secure enough to be able to leave the country), and skilled, you start to see the problem. The people who aren’t leaving are generally older, not as skilled, and less wealthy, leaving less opportunity for business to grow and sustain itself, with less profits to re-invest back into the local economy and hence employ more people. It’s really a vicious cycle in the truest sense of the phrase.
Compounding this problem is the fact that an increasingly aging population with skilled young people leaving in droves means that there’s a rapidly diminishing source of taxation revenue for these governments to continue to pay for their welfare, pension and healthcare bills. An ever decreasing tax revenue will eventually lead to the elimination of social support programs such as the old age pension and free healthcare, as governments simply find they can no longer sustain them.
The Root of the Problem
Europe’s people have been forced to endure the harshness of austerity packages and measures thrust upon them by the EU overlords for debt that they, individually had nothing to do with. In particular, young people suffer, who found themselves just out of school and thrust into an economy ruined by the excesses of previous generations, who are themselves often financially secure thanks to growing up in prosperous times.
The austerity measures themselves are amongst the biggest contributors to the ‘vicious cycle’ that is seeing European youth flee to shores afar and unemployment and business activity continue to stagnate.
The politicians and bankers who oversee the EU have actually made the situation worse by enforcing these strict austerity measures – and by continuing to throw money at the banking sector, the sole cause of the economic crisis in the first place.
In the words of Godfrey Bloom, member of European Parliament and the UKIP (UK Independence Party),
“The problem that we have is a flawed banking system, a fractional reserve banking system where bankers can lend money they don’t have. If you go back in time in the United States to the 1850s, that was a capital offense. You could hang for that.”
The problem really is the current fractional reserve banking system employed throughout the United States and Europe. I won’t go into the grim details of how a fractional reserve banking system works here (you can find a great explanation on Khan Academy), but in such a system, banks only have to keep a very small percentage of deposits on hand for dispersal to depositors (1% in Europe, if you can believe that).
The rest of the money is loaned out, giving the banks unprecedented ability to make utterly reckless and careless loans, knowing full well that their governments will never allow them to fail – so bankers have essentially been playing roulette on taxpayer’s money, and getting away with it.
Another quote by Godfrey Bloom about the unrelenting criminal behaviour of some of these bankers and the absolute refusal of EU governments to do anything about it:
“In the great Cypriot bank heist, of course the big boys got their money out early, didn’t they? It’s always the little people who get shafted, isn’t it? We now have a sick system, a situation, which the previous speaker alluded to quite rightly where the Fed, the Bank of England, the ECB, the Bank of Japan, all completely bankrupt, holding mountains of junk bonds bought with counterfeit money. Let’s all blame the retail banks but it’s the central banks where the cancer starts. Politicians, bankers, and lackey bureaucrats should be arraigned in an international financial tribunal, in the Hague, in the same way as war criminals.”
The misguided attempts at reviving the economy through economic stimulus (printing money they don’t have) are only hurting the situation more, as taxes are increased across Europe to help pay for this stimulus, and the stimulus money doesn’t find itself in the coffers of the ordinary person on the street – no, it finds it way into the coffers of giant banks and financial institutions (who, incidentally, pay almost no tax through offshore havens and other loopholes).
Then, of course, when it comes time to pay the piper, the big boys don’t pay a cent – it’s always the little guy, the unrepresented majority who continue to be shafted mercilessly. Take, for example, the recent raid on Cypriot banks, in which depositors who had over 100,000 euros (including many small businesses) were forced to pay between 6.75 and 10 percent of this, in many cases their entire life savings, to the European Union.
Cypriot bankers who invested poorly and ran their banks into bankruptcy face no penalty or consequence whatsoever – no, the punishment must be made by ordinary Cypriot depositors. The banks demanded a bailout from the Cypriot government who then turned to the European Union for a bailout, who in turn imposes harsh austerity measures to ensure the massive loans are eventually repaid.
But, as mentioned before, austerity measures are only making matters much, much worse, and contributing to the exodus of youth from Europe. Austerity measures lead to lower wages, dismantled unions, the removal of labour rights, a complete lack of employment security (if you can even be so lucky as to get work), and the slow elimination of welfare and healthcare systems, much to the extreme detriment of Europe’s citizens.
All of this leads to falling demand in the private sector, reduced business investment, reduced profits, reduced wages and a much lower demand for workers, and almost non-existent employment security. These terrible economic conditions lead to even lower demand as those who do have work scrimp and save on every penny, to save money and protect themselves against the inevitable layoff and the inability to depend on a once reliable state welfare system.
It’s almost exactly the same circumstances as those in the early 20th century that led to the Great Depression, and for some godforsaken reason, the politicians and bureaucrats of Europe continue to promote policies that point in exactly one direction – towards a long, painful and devastating economic slump.
The way out of this mess is twofold, and those actions are almost the opposite of what’s happening now.
First, make bankers accountable for their actions. No bank can be too big to fail, and bankers who flaunt the regulations and social contract they have with the people whose money they are playing with should be appropriately punished (and yes, this means actual jail time – not more bonuses).
Second, reverse the austerity measures and promote growth. No, some debt won’t be repaid for a long time, but the only way for all of this toxic debt to be repaid is to first promote productivity and growth by building huge public infrastructure works, enabling large scale jobs and employment programs, investing in the economy and society (including education), building more houses, establishing a Europe-wide green energy program, and most importantly of all – putting the continent’s people ahead of anonymous big business.