Despair and Decline: The Risks Behind Europe's Riots

Protesters in France, Italy, and Spain have been taking to the streets in large numbers, throwing rocks at police and demanding change from their governments. They are upset about things like the rising cost of living, housing prices, and cuts to public services. But the governments they are angry at say they have a serious problem: they have run out of money to give people everything they want. This clash between what people need and what governments can afford is at the heart of a growing crisis across Europe.

Many countries in Europe are struggling with slow economic growth, wages that haven't gone up, and big piles of debt. France is one of the hardest-hit, with a budget gap equal to 5.4 percent of everything the country produces in a year. Belgium, Italy, and Spain face similar problems, meaning their governments are spending far more than they collect in taxes. These gaps force governments to keep borrowing money, which only makes their total debts even larger.

France's total government debt is now 119 percent of its GDP, which means it owes more than its entire economy produces in a year. When a country owes that much, it has to pay higher interest to keep borrowing — like paying extra fees on a credit card that's already maxed out. During the same week that riots made headlines, the interest rate France had to pay on borrowed money climbed to over 5 percent, while stronger Germany only pays 3.4 percent. A credit rating agency called Fitch even lowered its view of France's financial future from 'stable' to 'negative.'

Many protesters say the answer is simple: tax the rich more. Economist Gabriel Zucman suggested a 2 percent tax on wealth over 100 million euros, which could raise about 20 billion euros a year from around 1,800 very wealthy families. But experts say this still wouldn't be enough to fix France's money problems, and the idea was already voted down in parliament once before. There is also a risk that very wealthy people would simply move their money to another country to avoid paying.

Raising taxes further is also difficult because taxes in Europe are already very high. In France, taxes make up 43.5 percent of everything the economy produces, and Italy and Belgium are similar. By comparison, Australia collects about 30 percent of its GDP in taxes. Even with all that money coming in, these governments still struggle to pay for everything people expect, like schools, healthcare, and other services.

Life has genuinely gotten harder for many families in Europe over the past decade. In France, household income per person has actually fallen, and the same is true in Italy — families aren't imagining it, their living standards really are shrinking. Spain has seen some income growth, but people there are still furious about sky-high housing costs. On top of everything, Spain was shaken this week by a deadly train disaster.

Europe's economy is also growing very slowly, which makes every other problem worse. France's economy shrank slightly in the first and third quarters of this year and grew by only 0.2 percent in the second quarter. Not every corner of Europe is in trouble — Poland has seen living standards rise greatly since the end of Communism — but the biggest, most powerful countries in Western Europe are the ones struggling the most. Even Britain confirmed recently that it faces a future of rising debt and falling household incomes.

The protests aren't only about money — some rioters in Paris carried political flags and spray-painted slogans on public buildings. In Spain, police say a group called 'Blocus' used social media to organize protests that they then pushed into violence and looting. Extreme agitators, sometimes called 'black bloc' groups, often push to the front of peaceful marches and turn them violent. Young men from migrant backgrounds were also seen clashing with police in Paris, linking debates about the protests to bigger debates about migration.

Migration has become a central issue in France's upcoming presidential election, with polls showing that anti-migration candidate Marine Le Pen is gaining support. Other political leaders, like Jean-Luc Mélenchon, have different ideas, but neither side has presented a clear, complete plan to fix the country's deep financial troubles. The challenges will not disappear no matter who wins the next election. Hard times make it harder for communities to trust and support each other.

Other countries, including Australia, face some of the same pressures building up in Europe. Government debt is lower in Australia, but it is still growing by billions of dollars every year. Young people in parts of Europe worry that their lives will be worse than their parents' lives were, while migrant families worry they won't find the better future they came looking for. No matter how loud the protests grow, governments cannot simply borrow and spend their way out of the problem.