There is a growing clamor in the Eurozone from those who believe that the euro is overvalued, and that this is blocking the competitiveness of European products on world markets.

Arnaud Montebourg, a French government minister, said in late October that the euro should decline against the dollar by about 10%: “Ten percent is not even a devaluation, but just a correction of the exchange rate, in order to better reflect the reality of the Eurozone.” European Commissioner for Industry Antonio Tajani, according to Le Monde, agrees: “The euro is too strong now,” but stresses that he is only expressing his personal opinion and not the official position of the European Commission.

French President Francois Hollande already warned in February of the danger of an excessively strong euro. Speaking before the European Parliament in Strasbourg, he said that fiscal policy needed to be changed in the Eurozone, to make the majority of the participating countries less vulnerable to foreign exchange fluctuations. However, these proposals were not supported at that time, not least because of the position of Germany, whose exports benefit from the strong euro.

In January 2014, European Union members will be required to open their labor markets for citizens of Bulgaria and Romania, which joined the EU in 2007. The potential migrants are already being perceived as a threat to the countries of Western Europe. As an example of the consequences of an open labor market, politicians are abolishing the restrictions on free movement for citizens from the EU-8 countries (Poland, Czech Republic, Slovakia, Estonia, Latvia, Lithuania, Slovenia, and Hungary).

Eight Eastern European countries received the right to work without limitations in all EU member countries on May 1, 2011. As a result, between April 2011 and January 2012, according to statistics from the European Migration Center (EMC), the number of labor migrants from the EU-8 countries to Germany rose by 48,000 and reached a record number of 271,000. For comparison, in previous years and for the same period from April to January, the number of migrants decreased on average by 10-20,000 because of the seasonality of most of their jobs. A major proportion of migrants – nearly 66% – are Polish citizens.

An aging population and rise in unemployment have brought to light a new negative trend: Social contributions from the working population are no longer enough to pay benefits to pensioners – at least not in the amounts they have grown accustomed to.

Politicians are calling this phenomenon one “worthy of attention,” while pensioners are calling it “a catastrophe.” The first to sound the alarm was the province of Tarragona, where there were 262,550 working people and 154,144 pensioners in 2012. It has always been considered that the ideal ratio was 2:1 – two working people to one pensioner. In Tarragona, that figure is 1.7:1, which has already generated a budget deficit of €250 million per year. The province’s average pension is €826. Tarragona, like the rest of Spain, is accustomed to living well.

The world is changing before our very eyes. Even 15 years ago, it was reasonable to use the word “unipolarity” to talk about the power balance in politics and economics. Benchmarks for success in business were also set by Western companies. The structure of the present world order is much more diverse. The role of the locomotive of economic growth lies with developing countries, and companies that originated there are increasingly conquering heights set by Western businesses. BCG ranked 100 countries with emerging markets that have the chance to determine the shape of the global economy in the coming decades.

In recent years, developing countries have justifiably earned the title “driver of economic progress.” Already, their markets are voluminous and will be even more so in the foreseeable future, thanks to the constantly high rate of economic growth. At the same time, a national accumulation of wealth is taking place, as consumer savings grow in response to the increase in income. Overall, this leads to an improvement in the general welfare of the citizens in those countries. Thus, in 2012, private wealth grew 7.8% worldwide, mostly thanks to developing countries in Asia. Prosperity indicators in Asia (13.8%) and Latin America (10.5%) were significantly higher than the global average. Furthermore, BCG projects that by 2017, developing countries will account for 70% of all increases in private wealth.

For many years, China has been the most populous country on the planet. And the world’s most populous country has gradually become more and more important within the world economy. It is obvious that the country’s territorial and infrastructural needs will only continue to grow. In this light, China’s cooperation with its neighbors is a key issue. WEJ tried to answer the question of what goals China is trying to achieve in cooperating with Russia.

It is believed that when the Chinese pursue joint projects with the Russians, they are mainly interested in territorial space. In fact, the sparsely populated regions of Eastern Siberia would not seem to be the worst choices for Chinese investment. But Moscow is very cautious about the prospects of such investment, perhaps fearing that such projects may whet Beijing’s appetite for more.
 
Russian President Vladimir Putin has repeatedly recognized that one of his most important foreign policy achievements is the settlement of Russia’s border dispute with China. Russia has transferred to China an area of 170 square kilometers on the Tarabarov and Bolshoy Ussuriysky islands, at the confluence of the Amur and Ussuri rivers. This territory had been the subject of a serious dispute between the two countries at the end of the 1960s. By solving this old problem, Russia has deprived China of the opportunity to make new demands. At the same time, it has removed an item from the agenda of talks that could have adversely affected the prospects of Sino-Russian cooperation.

Robert Walker, President of the Population Institute in Washington, D.C., told WEJ in an interview about the repercussions of uncontrolled population growth, how overcrowding will affect macroeconomic indicators, and what needs to be done now to keep the situation from losing control.

Mr. Walker, in your view, is the problem of overpopulation on Earth really so overwhelming, or is the scope of the crisis being exaggerated by the media?
Rapid population growth threatens our long-term economic growth and ecological stability. The problem is real, even if some people underestimate it.

Yet according to forecasts by World Population Prospects, which is released every two years by the  UN Department of Economic and Social Affairs, the most likely scenario is one in which the population declines due to a declining birthrate…
Yes, but this is an understated (conservative) scenario based on the assumption that the global birthrate will continue to decline in the future. According to the “medium variant” population projection issued by the United Nations earlier this year [editor’s note: which developed four scenarios: high, medium, low, and a scenario with a constant birthrate], world population is expected to surpass 9.6 billion by 2050, and 10.9 billion by 2100. This is a conservative projection that assumes that global fertility rates will continue to decline. If fertility rates remain unchanged, world population could surge to 27 billion by the end of the century. Fertility rates, however, are not decreasing as fast as previously hoped in many developing countries, and adolescent pregnancy rates in many areas are on the rise again.