Monday, December 12, 2011

A Bad Time to Move to Europe?

(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

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!


  1. Anyone can talk themselves out of not doing something they don't want to do. Excuses are abound. But I've learned that timing, when it comes to these sorts of things, are essentially meaningless. People still move to Portland, although our economy has been pretty bad since about 2001. You can make it work anywhere if you have the skills, ability, and drive.

    I always put it into perspective with this: There are plenty of unskilled immigrants in Europe. If they make it, then I can make it too. Because being unskilled is a lot more difficult.

    I still have my eye on Spain so far...

  2. @thedr9wningman: Spain has an official unemployment rate of around 20% right now. It's possibly one of the worst countries to be in right now, from an economic standpoint. Still, I can understand where you're coming from :)

  3. The economy is being hit everywhere...Italy is really bad right now.

  4. Do you think that countries will end up pulling out of the EU? Or getting rid of the euro?

  5. @Sharon: I think it's impossible to say at this point. The political leaders aren't stupid and they know the latest work to "save" the Euro is a short-term patch for a long-term problem. If the Euro falls, the EU might fall with it, but I doubt the latter.

    It's entirely possible that the UK may withdraw. They've never been comfortable with the EU, they refused to adopt the Euro and never signed onto the Schengen agreement.

    At this point, I suspect that the Euro will hold together, as will the EU ... but I wouldn't bet a lot of Euros on that.

  6. i'm planning to move to spain at january for a masters program, but with the financial crisis, i was wondering if it would be apropiate. What do you guys think? is daily life becoming expensive?

    1. I don't think it's too expensive at all. That being said, it's impossible to know if it's a good idea for you or not. It depends on what you're giving up to move to Spain. Spain's pretty tough right now, but I'd seriously consider it, depending on where you're coming from.

    2. Patty y Jorge, it all depends on how you're going to live here. Will someone be sustaining you from the US? Or do you plan to get a job in Spain? If so you must bare in mind that the unemployment rate is currently set at around 25% and only bound to get worst. Add to that, the fact that the taxes have just been raised. Starting September we will have 21% tax on all products but our salaries will remain the same. So you can see this clearly: Spain's minimum wage is around 700 euros a month. The United Kingdom's tax rate is 20% and their minimum wage is around 1000 euros. France taxes a 19% but their wages are about 1300 euros. Also, in cities like Madrid renting an apartment or even a room is quite expensive. For instance, renting a room in a shared apartment is usually around 300 euros, not including other expenses.

      Besides the huge economic problem the country is currently facing, it is a nice place to live in with excellent food, hot temperatures in the summer (if you like that) and plenty of opportunities to party.

      I, however, along with the other 68% of Spanish people between 18 and 35 years old, I'm trying to get out of here ASAP.