Over the past decades, the demographic conditions of European countries have been
characterised by decreasing fertility rates and, consequently, fewer births and an
ageing society. The Member States of the European Union face similar demographic problems,
with the number of births stagnating or decreasing and the total fertility rate falling
beneath the 2.1 value necessary for the simple reproduction of the population. The
European Union does not have a family policy, and the Member States deal with the
challenges arising from the ‘demographic ice age’ through different methods at the
national level, taking into account their countries’ different needs and cultural
backgrounds, and especially their ever-shrinking financial possibilities, with little
success. This chapter analyses in detail the effects of demographic changes on economic
growth, labour markets, monetary policy, budgetary and other government policies,
and, ultimately, the sustainability of pension systems and retirement livelihoods.
The chapter attempts to demonstrate that a coherent family policy and other related
government policies could have a positive effect on the current unfavourable demographic
processes within individual countries, as well as on their expected negative consequences,
if they were to focus on the demographic challenges in a meaningful way. The conditions
in Hungary are described, in addition to international trends.
