Over the past two years the European Union has faced its biggest refugee crisis since World War II. According to Eurostat figures from 2015, more than 1.25 million first time asylum-seekers applied for international protection across the EU’s 28 member states — more than double that of the previous year. To put that figure into context, the summer of 2015 more than 300,000 applications were made. That’s only around 600 applications for every million Europeans. (Eurostat, 4/03/2016)
The current Muslim population in Europe is estimated in 45 million less than 5% of the total(Muslims represent 8% of the population in France, 6% in Germany, 5% in Great Britain.), but is forecasted to grow to more than 10% by 2050. With the rise of Europe’s xenophobic Far Right parties and ISIS terrorist attacks now exacerbating tensions over immigration, what political steps should EU policymakers take to ensure the future of a diverse Europe? If a “Fortress Europe” approach is impracticable and undesirable, what should be the contours of a European immigration policy and what reforms are needed as regards social benefits and employment rules?
The demographic aspect
Opinion formers must challenge the widely-held idea that there is only a finite pool of jobs, so that newcomers threaten job-holders. The European public must be encouraged to understand that newcomers also bring fresh demand and so growth, and that would be given a strong push by EU leaders’ reference in a European Council to the expected shrinkage of Europe’s labor force in the years ahead.
By mid-century, the ratio between working-age people making up the active population and those who are retired and drawing a pension will have shrunk dramatically from 4:1 today to just 2:1 . The only way to fund social security systems will be to import young people as workers and taxpayers. (EU demographic indicators, March 2015)
Until the refugee crisis broke, in 2015 Germany’s population of 82 million was expected by 2030 to have shrunk by 6 million and by 2060 to just 65 million. Some recent forecasts instead see a possible stabilization of the overall population, although the ageing factor remains a major problem. For Europe as a whole, the next 20 years could well see a faster reduction of the working age population than at any time since the Black Death in the mid-14th century.
The economic aspect
The immigration related argument and pointing that threatens the European economy comes down, of course, to money. In 2015 the influx represented an immediate cost of €5bn to Germany and others, but within five years it will become an economic thesaurus. The IMF experts have considered that far from being a burden, the surge of immigrants will have boosted the GDP in European countries by 0.25% by 2020, which is something like €35bn. (OECD, 2011)
Economic migrants are far from being the burden that politicians and the media suggest. Although widely vilified as ‘benefits scroungers’, they predominantly come to Europe to find work.
Public opinion demands that native European’s jobs should be protected from newcomers, whether refugees or job-seeking migrants, yet the truth is, Europe is shrinking workforces are crying out for both categories to help restore much-needed economic dynamism. More publicity should be given to the stories of migrant entrepreneurs who are fostering the revitalization of impoverished urban neighborhoods by creating jobs and prompting innovation in products and services. Migrant entrepreneurs account for 10% of overall self-employed businesses in Germany, 11% in France and an impressive 14% in Britain. It is one of the most stubbornly-held misconceptions that newcomers displace existing job holders by undercutting them and accepting lower wages. Economists have long mocked the ‘fallacy of labor scarcity’ and its notion that a finite number of jobs have to be divided, with newcomers therefore I stealing work from native employees. Instead, migrants swell the workforce and help to expand the overall economy, but it l s a message that has gained little traction with public opinion. (Walker, 2007)
That process might well be speeded up if job seeking immigrants were able to accept lower wages than native European workers. That idea, needless to say, is opposed by trade unions.
Especially for the Nordic Countries the arguments for quickly getting the newcomers into work as an overall economic boost are convincing. The public mood in the EIJ I s Nordic countries has been swinging against refugees, but the IMF remains convinced of the benefits. A back-of-the-envelope calculation shows that real GDP in the average Nordic country will be about 2.5% higher by 2020 compared to a scenario in which there is no continued migration, it states in a mid-January report. (IMF, 2016)
The EU should consider migration as part of the solution to its looming pension crisis
The crude ‘gee-whiz’ statistic increasingly used by those policy analysts concerned with the ageing of Europe is that by mid-century the present ratio of one pensioner for every four workers will have shrunk to one to two. With today’s pension systems already under severe pressure, that’s an alarming prospect.
The European Commission last year published a study of the likely effects of ageing on pensions, and found that stemming the flow of immigrants would substantially raise pension costs. It calculated that each yearly reduction of 210,000 people in the numbers of newcomers over the next 15 years would translate into higher pension costs amounting to 0.1% of GDP.
‘Countries receiving the largest inflows (of refugees), I the EU report said, ‘would experience the strongest reduction in pension outlays’, adding that they would also cut health service and old age care costs. (European Commission, 2015)
The educational system and the immigrants
The refugee crisis is not a passing phenomenon, and requires a long-term policy approach if it isn’t to destabilize European society. It also offers a solution to the waning numbers of students in the education systems of EU countries.
Europe ‘s declining birthrate threatens the viability of establishments ranging from kindergartens to universities. Students in Germany were slated to lower by 10% by 2025, but now the immigrant influx will help redress that shrinkage.
This still leaves the problem of how to avoid underperforming schools that compound the difficulties of integrating immigrant communities. The record so far in many parts of Europe is discouraging, with children of ethnic minorities tending to score much lower than the average. Innovative schemes in the Netherlands and France, however, which are geared specifically to the integration of second-generation migrants are proving successful – and should be replicated in other countries. (IMF, 2016)
Although the absolute scale of protection needs facing Europe is still smaller than that in many countries of first asylum the unplanned, fast changing, and unevenly distributed nature of the flows has caused serious difficulties for countries with highly organized immigration and integration systems, labor markets, and social services. Emerging struggles in many European countries to continue to provide for new arrivals at a high standard the deteriorating conditions on the Greek islands are one highly visible example. Countries in Europe and elsewhere will have to think hard about how to approach their protection responsibilities. Giving in to the impulses to erect bigger fences without concomitantly dealing with the root causes of these movements will only serve to deepen the pockets of smugglers, not reduce the flows themselves. Most thinking has pointed to a need to approach refugee- and migrant-producing situations in a much more comprehensive way that moves beyond humanitarian and asylum tools alone. In a more connected and mobile world, waiting to deal with a problem until it reaches a country’s borders is not sustainable. In the same vein, providing protection can no longer be seen as a purely national responsibility; responses that mobilize both financial and political resources at the regional—and global—levels will need to become the new normal.
(March 2015). EU demographic indicators. European Parliament.
European Commission. (2015). The 2015 Pension Adequacy Report:current and future income adequacy in old age in the EU. Luxembourg.
Eurostat. (4/03/2016). Population and social conditions. http://ec.europa.eu/eurostat/en/web/products-press-releases/-/3-04032016-AP.
IMF. (2016). The Refugee Surge in Europe: economic challenges. IMF.
OECD. (2011). Migrant Entrepreneurship in OECD Countries. Paris: OECD.
(2007). T. Walker, Why economists dislike a lump of labor (σσ. 279-291). Review of Social Economy.