Fall in population threatens economic future of Europe

A drastic slump in birth rates combined with an ageing population will undermine Europe's prosperity within the next 20 years unless life is made easier for parents and immigration is encouraged, according to a European Commission report.

The document published yesterday points to a demographic timebomb and a widening gap between the European Union and the United States, as European workers age and birth rates lag across the continent.

The document points out that the fertility rate in Europe is "insufficient to replace the population" and adds: "Never in history has there been economic growth without population growth."

More controversially, the green paper also concludes that "ever larger migrant flows may be needed to meet the need for labour and safeguard Europe's prosperity".

The findings challenge policies adopted by many European countries, which have rushed to introduce populist measures to restrict immigration.

The figures suggest that governments may be sacrificing long-term economic prosperity for short-term electoral gain. They also indicate that more effort should be made to help young couples to balance the demands of working and parenting.

Between now and 2025, the population of the 25 countries of the European Union will grow slightly from the current figure of 458 million to 469.5 million, although this 2 per cent rise is because of immigration. But by 2030 that figure will fall to 468.7 million.

Between 2005 and 2030, the number of working-age people (between 15 and 64) will fall by 20.8 million, or 6.8 per cent, while the number of those over 65 will more than double, growing by a total of 40 million.

Britain and France are the only two big nations in which population will rise in the next half-century, and in one-third of Europe the demographic decline is already under way. By contrast, projections show the American population increasing by more than a quarter between 2000 and 2025.

The European employment and social affairs commissioner, Vladimir Spidla, called for consultation and argued: "All age groups will be affected as people live longer and enjoy better health, the birth rate falls and our workforce shrinks. It is time to act now."

Surveys show that Europeans have fewer children than they would ideally like, the document says, adding: "The low fertility rate is the result of obstacles to private choices: late access to employment, job instability, expensive housing and lack of incentives (family benefits, parental leave, child care, equal pay)."

Though it suggests immigration alone is not enough to solve the problem, the report says it "could help to mitigate the effects of the falling population" and adds: "The option of a wider recourse to immigration ... needs to be discussed".

Claude Moraes, a Labour MEP and co-president of a parliamentary group on ageing, said: "This is significant because it is a proper study of working-age decline which states that we need some managed migration. What a number of politicians have done is to pretend that migration is a population problem when this document says that it is one, important solution, among many."

The Commission's report, which is designed to start a consultation exercise, also points out that young parents "may want to spend more time with their children and work more at another time in their life".