Greece spends 1 billion euros a year on pro-child policies

It has one of the lowest fertility rates in the region – on a par with other countries plagued by the same problem, such as China and Japan – which the Greek prime minister called a “ticking time bomb”.

The country’s birth rate has been steadily declining year-on-year, with 2022 marking the lowest level in nearly a century.

The government is now taking steps to prevent a possible demographic decline as the economy ages and the need for labor increases.

Last week, Greece announced a series of measures to help boost the birth rate through extra childcare benefits and tax breaks for parents.

The European country spends 1 billion euros a year to promote childbirth, Reuters reported, and already offers incentives such as maternity benefits and allowances for baby items. The new measures are part of the government’s plans to increase the birth rate.

But efforts to encourage people to have more children will be in vain without economic incentives to go hand in hand with it, as Greece is the second poorest country in the European Union. So the country also announced an increase in pensions and the minimum wage from next year.

A combination of social and economic factors explain Greece’s predicament. About two decades ago, an economic crisis plunged the country into deep debt and austerity, diminishing Greeks’ job prospects and causing them to emigrate for better opportunities abroad. While Greece has seen its population ebb and flow through wars, it has lost its most skilled talent during the financial crisis. These have created far-reaching effects, including the country’s labor shortage and ongoing demographic decline.

Greece’s economy is in a better place today, with 2% growth in 2023; however, it is still significantly lower than in 2007. Challenges such as high unemployment and inflation continue to influence the decision to start and raise families. An aging population could put additional pressure on its economy, which already has a heavy debt burden.

It can be hard to break out of a trend that is intrinsically linked to the way people live.

But at least Greece shares its headaches with other countries like Italy. Russia is also experiencing demographic decline, albeit for different reasons triggered by its invasion of Ukraine.

Hungary faces a similar conundrum. It offers loans of €30,000 as well as grants to people in the hope that they will consider raising their families.

Finally, reversing the social fabric of countries is not done in isolation – economic and financial policies will need to be in step.