Greece is struggling to reform its spending practices and stimulate future economic growth because it has a large and growing debt burden to deal with. The nation has been hit by the double-whammy of rising debt and a contracting economy, which means there is more and more debt which needs to be supported by less and less tax revenue and economic output.
But here’s another threat — What if there are fewer and fewer Greeks responsible for the nation’s debt burden in the future?
Essentially, if you are young and you see that your country is burdening you with a massive debt liability, sans the government benefits of your parents, you might decide to simply jump ship. Head to another country and avoid being responsible for the debt amassed by your forefathers.
Thus this latest stat via CNBC caught our eye:
According to a survey published last month, 7 out of 10 Greek college graduates want to work abroad. Four in 10 are actively seeking jobs abroad or are pursuing further education to gain a foothold in the foreign job market.
The survey, conducted by the polling firm Kapa Research for To Vima, a centre-left newspaper, questioned 5,442 Greeks from the ages of 22 to 35.
There could be a “brain drain” if talented young people see few prospects in Greece, he said. But he also expressed doubts about their prospects in other Western countries where unemployment is a problem as well.
So this could result in more than just a ‘brain drain’. It could create a resident drain as well, as more and more young people opt not to be indentured servants to the Greek state.
How would Greece’s long-term debt sustainability look if half of the young just picked up and left? Far fewer people would be responsible for the nation’s liabilities.
P.S. No, this doesn’t work for Americans. America is one of the only nations to tax its non-resident citizens no matter how long they are abroad.