Monday, December 12, 2011

A Bad Time to Move to Europe?

Source: epp.eurostat.ec.europa.eu
(but I'll be damned if I could find it there)
If you're planning on emigrating to Europe, you might be concerned about the financial situation over here, so let's take a quick peek. We often speak of the PIIGS:
  • Portugal
  • Italy
  • Ireland
  • Greece
  • Spain
These are the countries whose economies are performing so poorly and whose debt is so out of control that they threaten to bring down the Euro. How bad is their debt? Well, according to the above infographic:

CountryDebt % of GDP
Portugal93.3%
Italy118.4%
Ireland94.9%
Greece144.9%
Spain61.0%

And the US? Try a projected 100% for 2011 (page 3, PDF), compared to 57.6% when Bush took office. If a country can't manage its debt, creditors get nervous. Most of Europe is doing better than the US in debt management and they're casting a nervous eye towards the US. If the US can't get her house in order, she threatens to take down the world economy, dependent as it is on US dollars.

Still, France is looking at losing her AAA credit rating and I routinely hear people ask "why move to Europe now?"

It's a tough question, but there are a few things to keep in mind. First, this is cyclical. All economies have ups and downs. It's unfortunate that world financial systems have been so poorly regulated that they've helped to collapse our economies (history will identify the causes of this financial crisis far easier than those of the Great Depression). It's also unfortunate that the problem is dragging on so long. Given that this happened relatively shortly after much of Europe switched to the Euro, it's fair to say that this is spectacularly bad timing. Of course, the Euro has always been rather poorly managed, but this is a serious crisis.

So should you reconsider your move to Europe? Maybe. Europe isn't worse off than the US, but as an immigrant, you won't be able to take advantage of many of the social services over here. European countries take care of their citizens when they're down on their luck, but as an immigrant, you won't have paid into the system and it's understandable that you won't get the same benefits. However, if you have a good position in a strong sector, Europe is still a fine choice.

The World is Round!

However, I keep telling people the world is round and they shouldn't forget that. Learn about other places! The main reason most people want to go to Europe is because that's what they know. But if you're worried about the economy, much of South America's economy is doing great!
China wows the world with double-digit economic growth, but Brazil has suddenly become the world's seventh largest economy, on its way to displace the U.K. as the sixth. Brazil's Gross Domestic Product grew 7.5% last year. Argentina's soared 9.2%. Others expanded just as fast. Paraguay's GDP climbed a stunning 15% and Uruguay's more than 8%.
From that same article: Brazil is on track to become the world's sixth largest economy, overtaking the UK and it's easy to emigrate to Uruguay. Don't overlook other great opportunities just because you've become fixated on one continent. It's a beautiful world out there!
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