A demographic crisis is gripping much of Europe, and Greece is one of the countries most affected.
It has one of the lowest fertility rates in the region, comparable to other countries that are annoyed by it same problemsuch as China and Japan – which the Greek Prime Minister has called a ‘ticking time bomb’.
Birth rates in the country have consistently fallen year on year, with 2022 marking a near-century low.
The government is taking action now to prevent a possible demographic decline as the economy ages and the need for labor grows.
Last week, Greece announced a series of measures to help boost the birth rate through extra childcare allowances and tax breaks for parents.
The European country spends €1 billion a year on promoting childbirth, Reuters reported thisand already offers incentives such as maternity benefits and allowances for baby items. The new measures are part of the government’s plans to increase the birth rate.
But efforts to encourage people to have more children will be in vain without an economic boost to match, as Greece is the European Union’s second poorest country. That is why the country also announced an increase in pensions and the minimum wage from next year.
A combination of social and economic factors explains Greece’s predicament. About two decades ago, an economic downturn plunged the country into deep debt and austerity, dwarfing Greeks’ employment prospects and prompting them to emigrate in search of better opportunities abroad. While Greece has seen its population ebb and flow through wars, it has lost most of it skilled talent during the financial crisis. These have had far-reaching consequences, including the country’s labor shortage and ongoing demographic decline.
The Greek economy is in a better position today grown 2% in 2023; however, is still significantly smaller than in 2007. Challenges such as high unemployment and inflation remain to influence the decision to start and grow families. An aging population could put further pressure on the economy, which is already struggling with a high debt burden.
It can be difficult to break a trend that is intrinsically linked to people’s way of life.
But at least Greece shares its headaches with other countries, such as Italy. Russia is also facing a demographic decline, albeit for different reasons, following the invasion of Ukraine.
Hungary faces a similar conundrum. It offers loans of €30,000 and grants to people in the hope that they will consider growing their families.
Ultimately, reversing the social fabric in countries does not happen in isolation; it will be necessary for economic and financial policies to be coordinated.
