2025 is headed our way

While we were all absorbed by the new government’s manic pace and by the dockworkers’ attempts to impose their will on greenhorn ministers, two important reports were published, one reminding us of where we are and the other trying to figure out where we are going – both as a country and as an EU member-state – in a world that is undergoing radical change. The European Commission’s «Sustainability Report 2009» notes the problems that all EU member states face because of the unpredictable consequences of the global economic crisis and due to the very predictable result of aging populations. No matter how severe the fallout from the economic crisis is, «the projected impact on public finances of aging populations is anticipated to dwarf the effect of the crisis many times over,» Marco Buti, director general of economic and financial affairs, writes in an editorial in the report. For Greece the problem is enormous, because the crisis found the country with an already bloated public debt (which will exceed 100 percent of gross domestic product this year) and with increasingly expensive social security costs. According to the report, if Greece does not tidy up its finances to the tune of 14.1 percent of GDP, by increasing revenues and cutting expenditure, the public debt in 2025 will be 160.3 percent of GDP and in 2060 it will be 884 percent. Today’s debt and deficits are already unendurable, so we are probably not far from the day when we can no longer borrow or pay interest. The EU also warns that Greece has the second largest cost stemming from its aging population (11.5 percent of GDP in 2060, behind Luxembourg’s 12.9 percent, against an EU average of 3.2 percent). In Greece, there are already fears that the social security system will not last beyond 2013 if it is not reformed. While Greece will be battling to solve these problems, what will be going on in the rest of the world? This is what another Commission report aims to answer. «The World in 2025: Rising Asia and Socio-ecological Transition,» predicts that in just 16 years from today, the Earth’s population will have risen by 20 percent to 8 billion people. The EU will account for only 6.5 percent of the world’s population but will be home to the largest concentration of people over 65 (30 percent). The United States-EU-Japan triad will no longer be the world’s leaders nor will the EU be first in exports. Before 2025, China will be the second greatest economic power and may even have passed the US, the EU and Japan in research and development investments. Of the 1 billion people who will make up the «global middle class,» 90 percent will be in developing nations. The rise of new powers in the international economy will lead to greater demands for energy (with an expected rise of 50 percent between 2005 and 2025), drinking water, food and raw materials. The tensions that will arise, hunger, thirst and the effects of climate change, may trigger the migration of up to 250 million people. The EU is already home to 64 million immigrants (9 percent of the population). «Without an important inflow of immigrants, the European population would start to decrease from 2012,» the report notes. Later it adds: «A success in the immigrants’ integration in Europe could mean an increase in the active population and a reduction of social problems.» The world of 2025 is expected to be multipolar, «reflecting the new balance of power and the loss of America’s leadership.» The report notes that «a common governance system on a world level is likely to emerge… but one does not know how it will evolve.» It stresses that the biggest challenges that the EU and its member-states face are today’s economic and social problems, the new conditions that will arise in industrial production and trade, the difficulties in securing energy and raw materials and, of course, the aging populations. The EU’s strengths include experience in handling complicated problems of «cohabitation» among different nations, investment in knowledge and research and the integration of immigrants. While Europe is struggling to survive, Greece’s future will depend solely on the Greeks. Without illusions, without excuses, without support.