EconomyPoliticsThe Macroscope

Eastern European Slow Implosion

What happened?

According to the UN’s 2017 Revision of World Population Prospects, nine of the countries at risk of losing a large proportion of their population over the upcoming decades are Eastern European nations. The report sees the move of young workers towards Western countries, noting that the population staying in these countries is getting older. Main contributors to migration of the younger citizens are low income, insufficient growth, and better opportunities in the West.

What does this mean?

Eastern Europe is facing a depopulation crisis. While in Western European countries, economic growth and immigration are boosting fertility rates, neither of these trends can help Eastern European countries. Unfortunately, factors are reaffirming each other. First, losing young, educated workers harms the economy because the number of working adults taking care of pensioners declines. And second, when only old people remain, this boosts the conservative voter base, further reinforcing anti-immigrant sentiments. A clear case in point is the recent reelection of the Hungarian president Viktor Orban: a fiercely anti immigrant leader.

What’s next?

If the projections of depopulation hold, next to harming economic growth, this might create a tailwind for populistic parties in the future. Populist parties are creating greater tensions within Europe and further deepening cracks in the 28-nation EU bloc because of political disagreement. As a result, these Eastern European countries will increasingly look elsewhere for partners, accelerating the Eastern European turn to the east.