There?s more than one way to leave the euro - Matthew Lynn's London Eye - MarketWatch
Europe is starting to see waves of migration on a scale it has not witnessed since the great 19th-century exoduses to the new worlds of America and Australia.
In some ways, that may make the single currency work better. But it will also leave a hollowed-out periphery. And while valuations may get very cheap in nations such as Spain or Italy, investors need to be very careful about buying into economies that will be locked into permanent decline.
When times are hard, people have always looked to make a living for themselves somewhere where the prospects are better. Times have been very hard in much of peripheral Europe for three years now, and so it should be no great surprise that we are now starting to see a massive movement of people.
Even so, the figures are startling. Italian emigration was up by a third last year, rising to 79,000 people. Traditionally, Italians have migrated from the poor south, but the biggest category now are young people from the wealthy north of the country. The under 40s make up half the total, compared with a third two years ago.
A study by Real Instituto Elcano in February showed 70% of Spaniards under 30 have considered moving abroad. Portugal has seen 2% of its population leave in the past two years. The numbers leaving every year has doubled since 2008. A record 3,000 people are leaving Ireland every month, the highest level since the famine of the 19th-century. Some of them are Poles going home, but many of them are Irish.
Not surprisingly, a lot of them are moving to Germany. More than a million migrants moved to Germany last year, according to the Federal Statistics office , a rise of 13% from a year earlier. The number of immigrants coming from Spain, Greece, Portugal and Italy has risen by between 40% and 45% compared to 2012. But others are heading to wherever they have traditionally found work: Britain for the Irish, South America for the Spanish, and the U.S. for the Italians.
No one can blame then for wanting out. There are no jobs where they are. In Greece, the unemployment rate for the under-25s is now 62%. In Spain it is 56% and in Portugal it is 42%, and rising inexorably every month. These are now countries where, in truth, you probably won’t ever get a job. Maybe it will get better one day, but with the entire European economy now locked into a depression it seems unlikely. If you hit 30 without ever having had a job, the chances are you won’t ever get one. If the economy ever does recover, a whole new generation will have come along to take the work that gets created. In circumstances like that, moving is the only rational thing to do.
