Europe must boost productivity in face of 'poor demographics,' Regling says
The number of deaths in Europe is expected to increase as the baby-boom generation continues to age, according to Eurostat, the European Union's statistics office. Assuming the fertility rate remains at a relatively low level, "negative natural population change" could continue, it said.
Europe's economy needs to become more productive as the continent's population ages and fewer people will be part of the workforce, European Stability Mechanism Managing Director Klaus Regling said.
The number of deaths in Europe is expected to increase as the baby-boom generation continues to age, according to Eurostat, the European Union's statistics office. Assuming the fertility rate remains at a relatively low level, "negative natural population change" could continue, it said.
"With our poor demographics, growth will mainly come from productivity gains. Structural reforms need to continue in all countries," Regling said in a speech in Bruges on Tuesday. "Europe needs to further increase the participation of women in the labour force and raise the retirement age. Stronger investment would also help."
A copy of Regling's comments were emailed by the Luxembourg-based ESM. He also said "every effort" must be made to integrate immigrants into the workforce.
"Politically, this can be a thorny issue," he said. "Yet without immigration, the population of countries such as Germany and Austria would already be shrinking."
The ESM provides financial assistance to any of the 19 eurozone countries that are experiencing or are threatened by severe financing problems. Its establishment in 2012 was part of the European response to the global financial crisis.
Since 2011 the institution, and its predecessor, the EFSF, has provided loans to Greece, Ireland, Portugal, Spain and Cyprus, disbursing €273 billion. That is 2.5 times more than the International Monetary Fund globally in the same period, Regling said. The ESM has paid-in capital of €80 billion.
A copy of Regling's speech can be found here.
The ESM said in a separate statement on Tuesday it had raised almost €1 billion through the sale of its 0% six-year bond that matures on October 18, 2022. The deal brought the total size of the bond to almost €4 billion euros, it said.
"Today's tap auction met with excellent investor demand, as the orderbook was oversubscribed more than nine times," Head of Funding and Investor Relations Siegfried Ruhl said in the statement.
(Alistair Holloway, alistair.holloway@wort.lu, +352 49 93 739)
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