I am writing this blogpost as the Greeks are heading to vote on the referendum that will have a huge bearing on their immediate political and economic future. I’m glad I’m not eligible to cast a vote in the referendum (mainly because I can’t understand the question, not being able to read Greek…). But even if I could read the question the choices both seem impossibly bad.
In short, the next few months and years look pretty bleak for Greece. But, having said that, the last six years or so have been pretty bleak for Greece. The chart produced above (courtesy of visualcapitalist.com) shows two exoduses from Greece over the past few years: economic and demographic. Most of the previous few quarters have seen a substantial flow of money from Greek banks and presumably without the recent capital controls, this flow would only get worse. It suggests depositors are worried about losing their money or having it converted into a new Greek currency.
More indicative of the country’s prospects is the Greek population decline. The Greek population has shrunk each year since 2010. The last couple of years have seen declines of over 75,000 people (out of a population of around 11 million – a rate of decline of about 0.7 percent a year). According to Wiki, this decline is only partially due to natural decline (although the Greeks are certainly dying in greater numbers than are being born – the discrepancy was over 20,000 last year) and therefore the majority of this decline must be due to net migration. And with unemployment of over 50% for 15 to 24 year olds, real GDP decline of 25% and GDP per capita decline of 17% since 2007, it is not surprising that thousands of Greeks are leaving their homeland.
Where are Greeks migrating to? Well, many of them are escaping to Australia (which perhaps shows how bad things really are in Greece!), in particular, the city of Melbourne. There are already an estimated 300,000 Greeks living in Melbourne, making it the third-largest Greek city in the world behind Athens and Thessaloniki. Since the middle of 2013, between 10,000 and 20,000 more Greek nationals have fled to Australia (the majority of these people dual nationals or with family ties to the lucky country). I would imagine that these numbers will swell in the coming weeks and months no matter which way the Greeks vote.
So there we have it, the reality of Greece’s economic problems playing out in population decline and emigration.
PS Part of Greece’s economic woes stems from its large pension payments (I think about 15 percent of GDP). Part of the problem is the generous nature of these pension payments that has received a lot of coverage in the media. However,there is also the demographic reality that around one-fifth of the Greek population is aged over 65 (up from 11 percent in 1971). At the same time, the number of future workers and taxpayers (those aged under 15) have declined from 25.4 percent to 14.4 percent in the period 1971-2011.