Ghost towns show Greece's battle with a declining birth rate and declining population

LASTA, GREECE – There is no one left to run the St. George Café in Lasta, a mountain village in Greece's Peloponnese region.

Instead, there's an honor system – just have a drink, leave a donation and enjoy the relics of a bygone era.

Portraits of lively residents on the walls belie the reality outside, where a deserted square, an abandoned school and abandoned houses offer a chilling glimpse into the future of a country in danger of population collapse.

Lasta is just one of hundreds of abandoned or “ghost” towns and villages scattered across Greece, a very visible sign of years of declining births, economic hardship and mass migration.

Economists warn that population decline is now putting significant pressure on a country just emerging from the crisis – with not enough young people to support the economy for generations to come.

“While Greece is seeing very strong growth right now, looking to the future, with fewer people to do the work, it will be difficult to sustain that,” Bert Cullen, chief economist at ING, told CNBC by phone. “.

Greece is home to one Lowest fertility rates In Europe: It is 1.3, half of what was recorded in 1950 and well below the 2.1 required to replace the population.

Last year, the country recorded just over 71,400 births, the lowest number since records began almost a century ago, down about 6% from 2022. Greece now has about one birth for every two deaths, and the proportion of the population over the age of 65 years. Nearly twice that age from 0 to 14 years.

This prompted Prime Minister Kyriakos Mitsotakis to warn of an “existential” threat to Greek society, as the country is more prepared than most for the broader demographic shifts experienced in developed countries.

“The truth is that our people today are among the oldest in Europe,” Mitsotakis said. He said Last year, I spoke at a Greek demographics conference.

It's an issue that affects some pockets of the Greek mainland and its vast archipelago more than others.

“This population decline is not manifested equally across the country,” Mitsotakis continued. “It has reached its peak in specific regions, meaning that national strategies are not enough and that local measures are also needed, as the general demographic collapse has literally become an existential stake for our future.”

This decline is most clearly demonstrated by the appearance of dozens of ghost towns and villages – sites with no or almost no residents, abandoned as locals move away or die. It can be difficult to determine the exact number of these sites, given their often remote nature, but recent estimates put the number of completely abandoned towns and villages at closer to 200.

Much of it has been forgotten, with crumbling buildings the only sign of former life. Meanwhile, others became like Lasta Sources of exotic tourismwhere visitors to the café and abandoned buildings are keen to experience a piece of history.

At Greece's last census in 2021, Lasta had a permanent population of 12, but when CNBC visited in 2024 there were no signs of permanent residents.

Young people have been among the hardest hit by the economic downturn, with unemployment among the youth It reaches its peak by 59.5% in the first quarter of 2013 – more than double the national average of about 27%.

As a result, many were unable to create new lives outside their family homes. Of those who did, many did so abroad, estimated at more than 400,000 people – or 9% of the workforce – Immigration During this period. Most of the rest moved to major cities in Greece, in search of work and better education.

Today, more than half (53.5%) of the Greek population lives in the capital, Athens, and its surrounding Attiki region, as well as the country's second-largest city, Thessaloniki. Meanwhile, all other regions, including Greece's prized islands, have recorded population declines over the past several years.

Many demographers say the country's population decline dates back to the 1980s, another period of economic decline. The decline in birth rates during that period has since led to a decline in the number of women in their childbearing years, with the proportion of women aged 20 to 40 now being 150,000 fewer than it was five years ago.

To help address this issue, Mitsotakis last year Fired A new Ministry of Social Cohesion and Family Affairs to unify and strengthen support for children and vulnerable groups.

In October, the ministry announced that it would spend 20 billion euros ($21 billion) until 2035 on incentives to halt population decline, such as child benefits, enhanced parental leave and tax breaks. Sofia Zacharacki, who heads the office, said the measures were intended to provide a wake-up call to society.

“We need a shock. We need something that creates, you know, a feeling of security and optimism, especially among young people,” Zacharacki, the minister of social cohesion and family affairs, told CNBC via video call.

“We are not only facing an economic impact… but also a mental problem that has been implanted in the minds of many young people, perhaps due to the recurring crisis and perhaps a feeling of disillusionment,” she continued, adding that funding must also be there. Giving more people the choice to start a family.

However, Cullen said he doubted that child support measures would be enough to change the trend, and that it was also likely that major policy changes would be needed to support demographic shifts.

“There doesn't seem to be a single example of a policy that was introduced somewhere that led to a rapid reversal of this decline,” he said. He added that other policies could include incentives to encourage more young people to stay in Greece, attracting those who have left back.

The Greek economy is expected to grow by 2.2% in 2024 2.3% in 2025 – Superior to major economies in Europe. The country's initial GDP forecast of 2.9% for 2025 was revised downward only due to the broader slowdown in the European Union.

However, economists warn that demographic decline may end up undermining this long-term growth.

“Demographic developments are the key to economic growth in general. It is related to the number of working hands and how productive those hands are,” Cullen said, highlighting the “strong link” between the growth of the working-age population and the per capita GDP.

Greece is not alone in suffering from this phenomenon: demographic decline represents a problem facing many developed countries. Japan and South Korea, with fertility rates 1.2 and 0.72 in 2023, respectively, among the best known examples of countries experiencing demographic decline. But a large part of the West, and China as well, suffers from a rapidly aging population and needs greater government support.

“We are currently in the midst of an unprecedented demographic transition, with global population growth steadily slowing, with no clear sign that the trend is about to turn,” Jim Reed, global head of macro research at Deutsche Bank, wrote in a November report. “. .

“Given that demographics almost certainly deteriorate further in the 2024-2049 quarter century (quarter century), it is reasonable to… expect another QC to expect below average long-run real GDP growth and real equity returns, Especially in Germany market (“developed markets in the world” added).