7-25-50

They help us to understand our present, and think about our future.

The first tells us how many we are. Not many, really. Europe represents 7 percent of the world population. A little over 500 million, in a world that has passed the seven billion mark. And according to the forecasts, this percentage will shrink to 5 percent by 2050. To understand the difference involved in being such a small slice of the pie, we should look back and remember that in 1960, when the curious experiment known as European integration got under way, the so-called Old Europe, still not entirely recovered from the war, represented some 20 percent of the world’s population. To go from a world in which one of every five people was a European to another in which only one of every 20 is reason for profound reflection on who we are, what we want and in whose company we can achieve it.

The second figure, 25 percent, tells us of our wealth. The European Union is the world’s largest economy and, with 16 percent of exports, the first trading power, ahead of China and the US. The fact that with 7 percent of the population we produce 25 percent of the world’s wealth, tells of our extraordinary productive capacity. But here too out future is in jeopardy. Not only due to our own problems — Europe being stagnant economically, indebted and burdened with record (26 million) unemployment — but because others, outside Europe, have been doing better than we have for some time now. Europe also has a problem of energy dependency, importing 54 percent of what it consumes, and 85 percent in the case of petroleum.

The third figure, 50 percent, indicates social expenditure in Europe as a percentage of the world total. If Europe is a world power in anything, it is welfare. We spend almost one of every three euros we produce (29.4 percent of GDP) on social policies. This belief in equity, articulated around the concept of the welfare state, is an essential part of our identity. These ideals are expensive: public healthcare policies, which enable Europeans to enjoy a record life expectancy, consume 11 percent of what we produce; and the pensions that cushion our old age, 12 percent. But even so, in the EU some 40 million people live in what statisticians define as extreme poverty.

How can we sustain our model when there are now 90 million people over 65, 20 million of whom are over 80? For the moment, for every person over 64 there are four of working age. However, if present trends continue, in 2060 there will be only two of working age to support each person over 65. Any change in this trend will involve boosting the birth rate, which in turn means taxes to finance new investments in education, health and social policies. As an alternative or a complement, we can foster immigration. But this requires thought as to the sort of immigration we wish to attract, and on policies of integration. Both options (more taxes, or accepting a more diverse society) arouse widespread rejection.

If we wish to sustain this model in a globalized world where we are going to be fewer, older and less wealthy, we must consider what degree of uniformity we can attain in social and fiscal policies. Between the 33.8 percent of GDP spent on social expenditure in France and the 17 percent in Romania, and between the wages of 38 euros per hour in Denmark and five in Lithuania, there is an abyss that calls for consideration. How much internal competition do we require in order to be competitive in the world market? Our current debates, envenomed by the crisis, are going nowhere fast. We Europeans are indeed in the same boat, but we waste our energy in squabbling, as if we didn’t know it.