Europe faces formidable socio-economic challenges. The deteriorating demographics are of the most significant concern to EU citizens. More funerals and fewer births are not good news for Europe’s future prosperity. Can migration be turned from a threat to an opportunity to address Europe’s demographic and economic decline? While in the past, immigration had been primarily driven by economic motives, in the last few years, Europe has experienced a significant surge of refugees fleeing wars and conflicts in Syria, Afghanistan, Iraq and sub-Saharan Africa.
A surge of small boats arrives on Europe’s southern shores and the UK, brimming with migrants willing to work, for example, doing low-skilled jobs in construction and caring for the elderly. Some politicians argue that Europeans do not want to take on low-paid and physically demanding jobs. They, therefore, believe that liberal labour market policies, including the employment of irregular migrants in precarious work conditions, can address the shortage of workers.
Still, economic needs are often subservient to political imperatives. Bruegel is a Brussels-based think tank devoted to policy research on economic issues. Its research studies give valuable information on why Europe’s migration challenges are gaining importance in many Europeans’ eyes.
The infighting within the Union on how best to tackle immigration is depressing
For instance, research shows that Europeans are more pessimistic about immigration than people on other continents. On average, EU citizens perceive that immigrants take more jobs than they create and take out more fiscal resources than they put in. Support for intra-EU mobility has increased, while extra-EU immigration has little public support.
EU citizens generally disapprove of the way European politicians handled the refugee crisis. This has helped populist parties gain electoral support in the last European Parliament elections. It is likely to continue being a cause of the decline of the mainstream political parties in Europe.
If one thing unites politicians in the EU, it is the certainty that a botched policy on migration will cost them their jobs. The infighting within the Union on how best to tackle immigration is depressing. Southern European countries such as Italy and Greece complain that they bear the brunt of EU rules, which force countries where migrants arrive to bear the expense of providing them with basic living facilities.
The wealthier northern member states think Mediterranean countries are flouting the rules by failing to intercept migrants as they set foot in the EU. As often happens, EU leaders prefer to kick the can down the road rather than develop long-term strategies to address the continent’s demographic and immigration challenges.
When the migrants’ ‘burden sharing’ strategy failed to materialise, the EU threw money at the problem. For instance, in the summer of 2023, the EU reached a migration agreement with Tunisia. In exchange for over €1 billion in financial aid, the country would prevent migrants from crossing the Mediterranean for Europe. However, in October 2023, Tunisian President Kais Saied rejected a multimillion-euro payment from the EU after relations reached a standstill on other issues.
For Europe to address its demographic and migration challenges effectively, it must rethink its strategies. This is no easy task, as the EU’s fragmented political set-up prevents it from agreeing on the way forward on issues that affect the member states differently. The impact of refugees in the medium- and long-term period depends on how fast they will be integrated into the labour market, the extent to which the newcomers’ skills will complement or substitute those of the local labour force, and their impact on the allocation of resources. The successful labour market integration will also counter some of the adverse fiscal effects of population ageing.
Europe’s demographic data is worrying. Population growth due to natural change (the balance between live births and deaths) had declined from 0.8 per cent in the 1960s to zero. In 2015, the EU saw a natural population decline for the first time since 1960. Since 1992, net immigration has been a more important source of population increase than natural change.
A critical step is to address the “welfare traps” risks created by the interaction of social benefits and the tax system. This tends to keep people on social welfare because the withdrawal of benefits has no significant increase in total income or improved quality of life.
A shortage of job applicants in Europe must not be filled by anyone willing to pay smugglers to get them there. Change will come when governments prioritise family-friendly policies and boost efforts to integrate migrants into the labour market and the local culture, as well as the rights and responsibilities this entails.