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In a silver-lining, refugees bring youth to aging continent

Vidya Ram London | Updated on January 22, 2018

Migrants set off on foot for the border with Austria from Budapest, Hungary, September 4, 2015. Hundreds of migrants broke out of a Hungarian border camp on Friday and others set off on foot from Budapest as authorities scrambled to contain a migrant crisis that has brought Europe?s asylum system to breaking point. Hungary says it is enforcing European Union rules that it must register all migrants caught crossing Hungary?s borders, but thousands are refusing and demand they be allowed to continue their journey to western Europe from war and poverty in the Middle East, Africa and Asia. The European Union normally allows free movement between the 26 countries of its Schengen border-free zone, but its rules require asylum seekers to register in the first country where they arrive and remain until they are processed. REUTERS/Bernadett Szabo   -  Reuters

In most European countries, the number of working-age people will fall dramatically unless there is immigration

Last week Dieter Zetsche, CEO of German carmaker Daimler, announced that his company will be sending recruiters into refugee camps in Germany.

“Most of the refugees are young, well trained, and highly motivated. Just the sort of people we are looking for at the moment,” he told the newspaper Bild am Sonntag.

Zetsche’s comments are hardly surprising, given the skills crisis potentially faced by the country. According to research conducted by think-tank Bertelsmann Foundation, so grave is Germany’s potential demographic crisis that without immigrations the number of working age people will fall from 45 million in 2015 to 29 million by 2050.

“This gap cannot be closed without immigration,” the think-tank concluded in a March report, estimating that the country will need up to half a million immigrants a year from outside the EU to meet its needs, since people from other parts of Europe who had moved to Germany for work returned to their countries as economic conditions improved.

Zetsche’s stance points to two faces of Europe’s refugee crisis.

While the continent faces one of the greatest challenges it has since the creation of the EU — providing refuge and potential settlement to the hundreds of thousands who have fled from conflict zones across the world, including Syria, Afghanistan, Lebanon, Libya, Eritrea and Somalia — some countries are recognising the opportunities that the newly arrived refugees could present to help contend with the skills gaps (both high and low end) in the face of demographics problems and immigration laws that have made it hard for companies to employ non-EU citizens.

While the demographic trend is particularly striking in Germany and also plagues Poland, a skills gap exists across the region.

In a survey conducted of businesses across Europe last year, McKinsey found that a large number struggled to find skills they needed, particularly among the young population — including in southern countries with high unemployment rates such as Greece and Italy.

A third of those surveyed said they faced major business problems because of a lack of skills.

Not an answer

Of course, it’s important to remember in all of this that refugees should not first and foremost be seen as an answer to Europe’s skills gap.

“People who come for asylum aren’t coming for economic reasons and decisions should not be made on that basis. We need to try and help integrate them regardless of their qualifications,” said Alexander Wilhelm, deputy head of the labour market at the German employers’ organisation, the BDA.

Even for those with the right skills there remain challenges such as the language barrier, and recognising the comparable qualifications that people do have, he said. An area likely to provide many opportunities are the young refugees.

The industry is having some success enlisting them in Germany’s dual system of vocational education and training, particularly with interest from the existing domestic population in decline. “We see that many of the companies see potential,” said Wilhelm.

Fortunately for business, Germany has been among the more progressive European countries when it comes to enabling businesses to hire asylum seekers.

Now asylum seekers are able to work three months after they arrive in Germany, down from a previous limit of nine months (Britain by contrast doesn’t allow asylum seekers to work while their application is being processed except in exceptional circumstances, and only in certain professions identified as having a major skills gap).

“We know many of them will stay, perhaps forever, and the challenge for us as a part of society is to do everything we can to help them integrate as early as possible into education, employment and society as a whole,” said Wilhelm.

Over in Sweden, while there are very limited opportunities for asylum seekers to work while their applications are being considered, if granted asylum, they enter a comprehensive two-year programme run by the Public Employment Service, Arbetsformedlingen, to give them the necessary knowledge of Swedish for their profession, and tailored training to help them enter the Swedish workforce.

There are currently around 45,000 people on the programme, with around a third having a job or further training at the end of two years, estimates Patrik Svensson of the Arbetsformedlingen.

Less hospitable

Elsewhere in Europe conditions are less hospitable: in Britain it’s largely left to NGOs to provide refugees with the support they need to integrate into the British workforce.

For example, the Refugee Council, in partnership with the NHS, has been running a programme to help refugees work in the health sector. “Doctors do need to transfer skills and get relevant skills and mentoring — it does take resources and investment but it’s a lot cheaper than training a doctor from scratch,” said Judith Dennis of the Refugee Council.

“One of the ways people integrate in a society is through work — and most people want to and expect to be able to look after themselves and their family.”

The problems with Europe’s attitude towards employment for asylum seekers and refugees is recognised at an EU level: in his first State of the Union address to the European Parliament last week, European Commission head Jean Claude Juncker called on member states to enable asylum seekers to work from the day they arrive in the country, though his proposal has little prospect of being implemented at a national level.

For now, however, Europe seems set on focusing on the costs rather than the opportunities provided by those coming to its shores. So far little area-wide assessment of the total cost of the crisis has been made, though individual nations have given an indication.

In Germany its estimated that it could cost up to €10 billion this year alone for the country to provide the necessary support and systems for the up to 800,000 expected to arrive in the country in hope of refuge this year (the scale of the challenge to Germany was highlighted this week as the country reinstituted border controls and temporarily suspended its part in the Schengen Agreement).

Budget allocation

The German government has already set aside €6 billion though Chancellor Angela Merkel has insisted that this can be done without raising taxes.

Timo Klein, an economist at IHS Global Insight, pointed out that the general government surplus for the year is likely to be in the region of €10 billion.

“Understandably, Finance Minister Schauble is thus extremely relaxed,” he said.

In Britain the government has indicated that it will spend funds from its foreign aid budget, both to support local authorities that take in asylum seekers, as well as for aid provision for asylum seekers abroad.

However, the size of its budget — a total of £1 billion to date including a recently announced £100 million — has faced criticism from those that argue that Britain’s response has been weak, compared to other parts of Europe.

Other countries have faced criticism over spending too. Greece, for example, which has received aid from the EU to help deal with the thousands who have arrived on its shores, has been criticised by NGOs in the past for focusing and spending far more on building defences and immigration controls, than providing for the migrants.

Lack of unity

While Europe’s crisis is certainly unprecedented it also has to be put in perspective.

Criticising the lack of unity in the EU’s efforts to contend with the crisis to date, and calling on countries to up their game, the Commission’s Juncker pointed out that refugees still represent just 0.11 per cent of the total EU population against 25 per cent in Lebanon.

Still, while business leaders such as Zetsche highlight how Europe now has an opportunity to act with its head and its heart, there is limited political will to do so.

(This is the second in the series on Europe’s migrants crisis).

Published on September 14, 2015

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