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Exodus from the Eurozone Debt Crisis

testosteronepit's picture




 

Wolf Richter   www.testosteronepit.com

Unemployment is a staggering problem in those Eurozone countries that are at the core of the debt crisis. Spain’s jobless rate jumped to 22.8%. Among 16 to 24-year-olds, it's an unimaginable 51.4%, up from 18% in 2008 when Spain’s crisis began with the collapse of its housing bubble. In Greece, youth unemployment reached 46.6%. In Portugal, it’s 30.7%, in Italy 30.1%.

And optimism, that essential source of energy for the younger generation, has been replaced by pessimism. Gallup reported that 80% of the people in the EU had a negative outlook on their local job situation. Crisis countries were at the extreme end of pessimism: in Portugal, 84% thought it was a “bad time” to find a job; in Italy, 91%; in Spain, 92%; in Ireland, 93%; and in Greece, 96%.

These numbers convey a sense of utter hopelessness. For young people, the vision of a good life that their society has imparted on them has gone up in smoke. A bitter irony: it’s the best educated generation ever—and the most pessimistic.

People deal with it the best they can. Some retrench. Even 35-year-olds move back in with their parents. They delay plans and wait for the situation to turn around. But others, the most energetic and entrepreneurial, those that the country needs to rebuild the economy, they don’t have that kind of patience. They pack up and leave to find a job elsewhere. And they are doing it in massive numbers.

Spaniards are heading mostly to Argentina whose economy has been booming over the last few years, though troubles are everywhere. The exodus reversed the flow from Argentina to Spain following Argentina’s bankruptcy in 2001. For many years a magnet for immigrants, Spain registered a net emigration of 50,000 people in 2011.

Portuguese prefer their former colonies. Angola, whose official language is Portuguese, has a wealth of natural resources, particularly oil and diamonds. Since 2002, after a quarter century of civil war, the economy has grown in the double digits every year, and Luanda has become the most expensive city in the world. According to the Organization for Economic Cooperation and Development (OECD), 70,000 Portuguese sought their fortunes in Angola in 2010 alone. Similar numbers are expected for 2011. For Portugal, with a population of only 10.5 million, it’s significant.

Other Portuguese try their luck in Brazil whose economy is in need of engineers and experts of all kinds. Brazil recently softened its immigration restrictions to attract the educated elite—and others have taken notice. For example, the number of Spaniards immigrating to Brazil jumped by 45% in 2011.

Ireland has had a net outflow of people since 2009. First, Polish immigrants who could no longer find work returned home, but then the Irish themselves set out mostly for Australia and New Zealand, which have favorable visa agreements with the EU. 40,000 left in 2011, many of them women.

Greeks head to Germany, an irony of sorts, given the bad will that mushroomed out of German efforts to impose proper accounting and strict austerity on Greece. Germany’s reluctance to do ever more to bail out the Eurozone has made it a global punching bag. Yet the numbers are already staggering. Read.... Germany Frets As Bailout Risks Balloon.

When educated and entrepreneurial young people leave their country in massive numbers, it impacts the economy for the long term. Their country invested heavily in their education, an asset, and now they put this asset to work in another country. There, they earn money, pay taxes, consume goods and services, and rent or buy a home—the exact activities that their own country must have to get out of the economic quagmire. Sure, emigration reduces the expenses for unemployment compensation and other services, but it drains the economy of energy, entrepreneurial spirit, can-do attitude, and knowhow.

And it worsens the debt crisis. For national debt to remain “sustainable,” young people need to stick around, start a productive career, consume, build up assets, move into those vacant homes that banks are holding, and pay taxes. But the exodus underway now doesn’t bode well for a long-term solution of the debt crisis—assuming that a country like Greece, well....

"The case of Greece is hopeless," Otmar Issing said. He should know. He was on the Bundesbank and the ECB. Another substantive voice in an increasingly loud chorus. But it’s legally impossible to kick Greece out of the Eurozone. So he suggested a procedure—a procedure that has been happening all along. Read.... Kicking Greece out of the Eurozone.

 

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Wed, 02/01/2012 - 17:54 | 2117872 CrazyCooter
CrazyCooter's picture

I think this is a question that a person can only answer for themselves. It depends on your skills, your assets, your circumstances.

Presently I live in Alaska, but I considered New Zealand at one point. Both have excellent qualities/opportunities for a working professional.

Regards,

Cooter

P.S. Don't listen to Simon Black.

Wed, 02/01/2012 - 23:07 | 2118796 Parth
Parth's picture

New Zealand? They don't even have anyone like Sarah Palin to keep things interesting. Asia is the ticket.

Wed, 02/01/2012 - 23:59 | 2118891 Freddie
Freddie's picture

James Cameron (the filmaker who is Canadian) is moving he and his family to New Zealand and is buying a big ranch.  I bet the f**k voted for the Democrats muslim.  

Thu, 02/02/2012 - 00:44 | 2118988 Oracle of Kypseli
Oracle of Kypseli's picture

Unless you drink or like ice climbing, NZ is a bore.

Thu, 02/02/2012 - 05:47 | 2119299 Kiwi Pete
Kiwi Pete's picture

We like it!

Thu, 02/02/2012 - 01:06 | 2119038 DoChenRollingBearing
DoChenRollingBearing's picture

I drink, but, I'll take Peru.  My money would go a long way there.

Wed, 02/01/2012 - 17:27 | 2117783 moonman
moonman's picture

FEMA camps

Wed, 02/01/2012 - 22:36 | 2118723 dizzyfingers
dizzyfingers's picture

moonman:

peanutbutter sandwiches as well as maid service and other amenities by prisoners hired by US government to "guard" us -- YEAY!!!!!

: Civilian Inmate Labor Program - Army Regulation 210—35

http://www.freedomfiles.org/war/r210_35.pdf

Wed, 02/01/2012 - 22:37 | 2118715 dizzyfingers
dizzyfingers's picture

removed -- duplications everywhere!!! sorry.

Wed, 02/01/2012 - 15:50 | 2117472 midtowng
midtowng's picture

Better learn another language. And judging from the above article, that language should be Spanish.

Wed, 02/01/2012 - 18:15 | 2117963 Sudden Debt
Sudden Debt's picture

YOUR PLAN IS TO MOVE TO CALIFORNIA OR TEXAS?!?! THAT'S STILL IN THE US!!!

 

Thu, 02/02/2012 - 00:42 | 2118985 Oracle of Kypseli
Oracle of Kypseli's picture

Some day soon, Texas will be a country. Hopefully!

Wed, 02/01/2012 - 19:29 | 2118242 Bernank Sheeple
Bernank Sheeple's picture

They can come to New Jersey!

Wed, 02/01/2012 - 19:50 | 2118303 Jumbotron
Jumbotron's picture

Snooki ???........That you ?

Wed, 02/01/2012 - 15:40 | 2117442 LawsofPhysics
LawsofPhysics's picture

That's easy, they will go to the same place that people from the USSR went, fucking nowhere.

Wed, 02/01/2012 - 18:13 | 2117954 Sudden Debt
Sudden Debt's picture

Don't be such a pessimist!! There are plenty of countries who will welcome the Americans!

There's Iraq

There's Vietnam

There's Libya

There's Iran

There's Panama

There's Columbia

There's Mexico

There's China

....

The only thing they need to say when they step off the plane is:

REMEMBER US YOUR FUCKERS!!! GO ASK YOUR DADDY WHO WE ARE!! OH!! THAT'S RIGHT!! HE'S DEAD!!! WE KILLED HIM!!

HEY!! YOU LOOK LIKE ME!!! SHOW ME A PICTURE OF YOUR MOMMA'S ASS!!  MAYBE WE'RE RELATED!!

 

 

Thu, 02/02/2012 - 07:01 | 2119327 jeff montanye
jeff montanye's picture

the u.s. didn't kill that many people in china (except maybe the japanese). and where the hell are afghanistan, pakistan, korea and cambodia? 

george w. bush and barack obama:the two worst back to back rulers since, what, the discovery of america?  the invention of agriculture?  

Wed, 02/01/2012 - 18:39 | 2118056 W10321303
W10321303's picture

When the shark bites, with his teeth dear....

Mac he's back in town....Look out old Mac

He is back! (hilarious)

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