The Bankrupt PIGS of Europe
What brought the PIGS to the edge
of the abyss?
All are neo-socialist states that
provide welfare for poor people, generous unemployment,
universal health care, early retirement and comfortable
pensions. Most consume 40 percent to 50 percent of their
gross domestic product annually, a crushing burden on
the private sector.
Dying populations is a second
two world wars, the Europeans lost their faith and
embraced hedonism and materialism,
la dolce vita.
Large families fell out of favor. Women put off marriage
and babies, and went to work. Birth control and abortion
were made readily available in every country and, if
just across the border.
For 30 years, the fertility rate of
Europe has been below the 2.1 children per woman
necessary to replace a population. In
Russia and Ukraine, a million people disappear
yearly. In Western Europe, the passing of the
native-born goes on quietly, as
Third World peoples come to fill the empty spaces
left by the aborted and unconceived.
These newcomers have neither the
education nor skills of the Europeans. Hence, they earn
less and contribute less in taxes, but consume more per
capita in social benefits.
As the number of young entering the
European labor forces shrinks, the number of seniors and
aged grows. And thanks to advances in medicine, these
retirees live lengthening lives. Thus the burden of
pensions and health care grows steadily and the need for
higher taxes and larger worker contributions increases.
Then there is globalization. In
Europe, wages and taxes are high, regulations heavy,
unions strong, and lawyers ubiquitous. Manufacturers, to
cut costs, have been outsourcing production to where the
labor is cheap and abundant, the unions are nonexistent
or weak, and health, safety and environmental
lax. Welcome to China.
Greece is the first European nation
to hit the wall. As an EU member state, she is obligated
to keep her deficit to 3 percent of GDP. But this year`s
is 12.7 percent, and Athens needs to issue $75 billion
in bonds alone to finance the deficit and roll over
The markets, however, are rating
Greek bonds as risky bonds. To borrow, Athens must pay
more than twice the interest rate Germany pays. Faced
with strikes by public employees and students, Athens
appears to lack the political will to make the cuts
necessary to bring the budget back toward balance.
As Portugal, Ireland and Spain gaze
on, Greece approaches a moment of truth. Should she
default, their bonds, too, will plunge in value out of
fear of a copycat default, and the interest rate they
pay would also rise. They, too, might then take the
The EU`s crisis would then be like
a crisis in the United States should California default
on its state bonds and interest rates on other municipal
bonds surged to double digits.
Is there a way out?
One option is for the EU to bail
out Greece with a huge loan. But if Greece cannot meet
her debt obligations now, how could she pay back the
loan? And if the EU cannot compel Greece to make deep
budget cuts today, what leverage would the EU have after
bailing out Athens and removing today`s pressure on the
A second option is to call in the
International Monetary Fund, which imposes tough
conditions on nations receiving IMF loans—the Third
World therapy. But problems would arise here, too.
First, it would be an admission
that the EU cannot manage its own household. Second, the
largest contributor to the IMF is Uncle Sam.
Why should America bail out Greece,
when the EU is larger and richer and did not help bail
out California in 2009? The stimulus bill did that in
2009, to which Europe contributed nothing.
Where Greece is at today, however,
we shall all arrive tomorrow.
In every Western nation, government
is growing beyond the capacity of taxpayers to bear.
Deficits and debt are surging. Not enough children are
being born to replace parents. The
immigrant poor who consume more than they contribute
are coming to take the empty places. Seniors and elderly
are growing as a share of the population. Companies are
saying goodbye to the West and moving offshore to
The West begins to look like
yesterday, while the East begins to look like tomorrow.
The West is approaching a crisis of solvency and of
democracy. We shall see if democracy, which grew popular
lavishing benefits upon all, is strong enough to start
clawing them away. Or will democracy try to keep piling
the burden on the producers until they rebel or depart?
CREATORS SYNDICATE, INC.
Patrick J. Buchanan
no introduction to
VDARE.COM readers; his book State
of Emergency: The Third World Invasion and
Conquest of America, can
be ordered from Amazon.com. His latest book
Hitler, and "The Unnecessary War": How
Britain Lost Its Empire and the West Lost
Paul Craig Roberts.