Atm we are all contributing 20% of our wage. Bluntly speaking, the moment my dad finished fucking my mom, I was saddled with a 6-digit debt. Declining birth rates will shake its foundation, but hey, lets get reelected.
And as the global economy turns down 2016 forward and European deflationary contagion accelerates, the European governments only have two choices:
- Cut pensions (either nominally, raising the retirement age, or by printing money via the ECB)
- Expropriate more money, i.e. raise tax rates and bail-in savings accounts when the overleveraged banks go belly up.
Either of those will depress the economy further (i.e. spiraling the toilet bowl contagion), thus the productive youth will leave because Europe does not tax foreign earned income nor wealth tax of middle class levels. The unproductive youth will stay and suckle the nipple of social welfare.
So then (mainland) Europe will have only two choices:
- Cut pensions (either nominally, raising the retirement age, or by printing money via the ECB)
- Institute international taxation enforcement and capital controls copying the USA's FATCA system.
Given the retiring WW2 boomers hold the political power (they are more numerous and hold more political positions), which outcome do you think will be most likely (Hint: it is in red color I think).
France has been a case exhibit. The retirees have rebuffed against raising the retirement age and cutting their benefits.