Search for

No matches. Check your spelling and try again, or try altering your search terms for better results.

assessments

Jan 1, 2015 | 13:14 GMT

12 mins read

Immigration Offers Germany Costs and Benefits

German Immigrants
(Sean Gallup/Getty Images)
Summary

The German economy is the largest in Europe, making the country a magnet for immigrants. This influx of immigrants has only picked up with the emergence of the eurozone crisis, as Germany is one of the few European countries that has maintained low unemployment amid the economic malaise. The crises in the Middle East and pervasive poverty in Africa have also led to a rise in the arrival of asylum seekers.

From an economic point of view, immigration benefits Germany. Immigrants help to mitigate Germany's demographic change as its population ages and shrinks. While this makes sense from a financial point of view, it also presents political problems. In recent months, anti-immigration sentiments in Germany have become more visible, and some recent arrivals to Germany have struggled to integrate into German society. In the near term, German authorities will continue to defend the core EU principle of free movement of people. In the long run, however, this position will come under increasing criticism, and a decline in Germany's support for free movement is possible.

The uptick in immigration to Germany has been staggering, growing by almost 60 percent between 2003 and 2013. In 2013 alone, more than 1.2 million people moved to the country, which has a total population of 80.8 million people. Net immigration — the difference between those who arrive and those who leave — was around 428,000 people. This is almost four times higher than the 2003 level.

According to Destatis, Germany's official statistics office, there are roughly 7 million foreigners living in Germany, or around 8.7 percent of the population. This is above the EU average of 6.5 percent. The number of people with an immigration background — those who have migrated to Germany since the 1950s and their descendants — is over 16 million people, making up roughly 20 percent of Germany's population.

The geographic distribution of foreigners shows that, even 25 years after reunification, there are still differences between former East and West Germany. In western regions such as Hesse and Baden-Wurttemberg, the number of foreigners is above the national average. By contrast, in former communist regions such as Saxony and Thuringia, the number of foreigners is considerably below it. The reason for this is simple — western Germany has higher levels of economic development and lower rates of unemployment than the regions that used to make up Eastern Germany.

Over the past 70 years, the profile of immigrants in Germany has changed. After World War II, amid economic recovery and rebuilding, the German government signed immigration agreements with a number of nations to attract workers. Among these, the most notable was Turkey, and an increase in Turkish emigration to Germany followed. Today, people of Turkish descent still represent the single largest group of people with migrant backgrounds. In the mid-2000s, the European Union expanded to encompass more nations in Eastern Europe, bringing a rise in emigration from the former Soviet bloc into Germany. Currently, nearly seven out of 10 immigrants in Germany come from other EU member states. Polish, Romanian and Bulgarian nationals represent the largest groups. Since the start of the eurozone crisis, increasing numbers of immigrants have arrived from Greece, Italy, Portugal and Spain.

In addition, Germany is also dealing with a rise in asylum seekers. The crises in the Middle East, most notably in Syria and Iraq, and chronic poverty in sub-Saharan Africa have resulted in significant waves of people applying for asylum in Europe. Germany is the European Union's largest recipient of asylum applications in absolute terms, although in terms of applications per inhabitant, Sweden comes first. According to Eurostat, the number of asylum applications filed in Germany grew by 40 percent year-on-year in the second quarter of 2014 while the average growth for the European Union was 22 percent.

The Demographic Impact of Immigration

A decline in fertility rates and a rise in life expectancy across Europe and most of the developed world means many of these countries are facing the problem of a shrinking and aging population. Germany's demographic challenge is particularly acute: It has one of the lowest fertility rates in the European Union. According to Destatis numbers, the nation's population has already peaked and is projected to drop to between 65 and 70 million people by 2060. Other projections set the decrease even higher. At the same time, the share of people aged 65 and over will grow from the current 20 percent to around 34 percent. This will lead to several fiscal problems for Germany — a smaller workforce means a smaller tax base and greater pressure on healthcare and retirement systems.

Immigration could help Germany deal with this demographic shift in two ways. On the most basic level, an influx of people helps counter the process of population shrinkage. In addition, immigrant families tend to have more children than German families. These two factors, however, may not be enough to prevent demographic change; even the fertility rates among immigrants are below the replacement level of 2.1 children per woman. In 2010, the fertility rate of foreign women was 1.6 births, compared to about 1.3 births for German women. Fertility rates among immigrants are also declining — in 2000, the rate was 1.7 children per woman. That year, 11.8 percent of all births in Germany were to foreign parents. By 2012, the figure had fallen to 9.8 percent.

Continent-wide, demographic decline will gradually lead to competition between nations for young and skilled workers. Some regions within countries will win out, while others will be left behind with old and unproductive populations. Germany is unlikely to be spared from this. A recent study by the Bertelsmann Foundation showed that immigration's mitigating impact on population decline has predominately benefited greater urban areas such as Munich and Stuttgart, while suburban and rural communities have not profited from the positive effects of migration. This threatens to perpetuate the existing regional development disparities. It could also consolidate the power of extremist movements into certain areas of the country.

Integration Remains Problematic

Over the past decade, the German government has made significant efforts to assimilate foreigners. It has established inexpensive language programs and made it easier for immigrants to obtain German citizenship. However, data indicates that integration remains a problem. According to a report by Germany's Interior Ministry, young foreigners are less successful in school than their German peers, leading to problems when searching for jobs.

Official data also shows that people with an immigrant background are less likely to have paid employment than non-immigrant Germans. The employment rate is especially low for women with an immigrant background: Only half of them are formally employed. The unemployment rate among workers with an immigrant background is almost twice as high as that among the non-immigrant population. Finally, people with an immigrant background who are employed are more likely to hold low-wage jobs such as part-time work, referred to as "mini-jobs."

The situation is particularly hard for asylum seekers. German law allows people applying for asylum and "tolerated foreigners" — people who do not have asylum status but have not been deported because of potential danger to their lives — to work after living in Germany for a year, but only with the approval of the immigration office. Before it issues a work permit, the Federal Employment Agency has to decide whether or not German workers are also available for the job in question. With little to no command of the German language, this situation forces many asylum seekers to remain unemployed or to work low-paid jobs.

Political Issues

Immigration has become an increasingly contentious political issue across Europe. The European Union's expansion to the east has made it easier for people from countries such as Poland, Romania and Bulgaria to legally immigrate to Western Europe. The economic crisis has also led to rising migration from Europe's economic periphery to its core. On top of these factors, the crises in the Middle East and Africa led to a growth in the number of asylum seekers arriving in the European Union.

The resulting rise in immigrant populations has led to growing resistance across Europe and to the emergence of nationalist parties that advocate stricter immigration policies. In some cases, these parties focus largely on Eastern Europeans, as is the case with the United Kingdom's UKIP party. Other parties, such as the Sweden Democrats, direct their enmity at asylum seekers. Germany is currently dealing with both forms of resistance to immigrants.

Germany's iteration of these anti-immigrant parties, Alternative for Germany, was born as an anti-euro party and called for a weakened European Union and Germany's withdrawal from the eurozone. However, in recent months, the party has expanded its platform to include opposition to immigration. In regional elections in the eastern states of Thuringia, Saxony and Brandenburg, local Alternative for Germany candidates focused on immigration-related crime and accused Polish and Czech nationals of committing crimes west of the border. At the federal level, the party accused Eastern Europeans of abusing Germany's welfare system. In the EU Parliament's May elections, Alternative for Germany performed particularly well in the former East Germany.

This trend has also bled into the mainstream. In December, the Christian Social Union, the sister party of German Chancellor Angela Merkel's Christian Democratic Union, proposed in a draft policy paper that immigrants should be required to speak German, even while in their homes. While the government in Berlin immediately criticized the idea, the episode shows the extent to which immigration has become a sensitive political issue in the country.

Late 2014 also saw the emergence of at least two new groups that oppose the presence of Muslims in Germany. In late October and early November, a protest group called Hooligans Against Salafists protested in western German cities such as Cologne and Hanover, attracting between 2,000 and 4,000 people and leading to clashes with the police. In Eastern Germany, a group called "Patriotic Europeans Against the Islamization of the West," commonly known as Pegida, staged large protests in Dresden and smaller protests in other cities. On Dec. 22, around 17,000 people took part in one of Pegida's rallies in Dresden (up from roughly 15,000 a week before). The group claims to be against religious fanaticism but also accuses economic migrants of taking advantage of Germany's welfare system. It also claims to be worried about the preservation of the German identity. While Pegida attracts several neo-Nazi and right-wing activists, it is also supported by lower-middle class people with no connection to political activism. This makes Pegida more politically relevant than the Hooligans against Salafists and creates more concern for German authorities.

Because the memory of Nazi rule remains fresh in Germany, immigration and the role of minorities are still extremely sensitive issues. Mainstream politicians try to avoid these topics whenever possible, but groups such as Pegida and parties such as Alternative for Germany are able to focus on an issue ignored by mainstream ones. Members of Alternative for Germany recently participated in Pegida's protests, and the party said some of the group's demands were genuine. In absolute terms, the presence of asylum seekers in Germany is not nearly as significant as the presence of EU citizens, but the fact that most of the people applying for asylum are Muslim poses difficult questions for German authorities and makes them a soft target for anti-immigration groups

Looking Ahead

Immigration will be a key political issue in Germany for years to come. Berlin will continue to balance the political tensions caused by the arrival of foreigners with the nation's overall interest in attracting immigrants to mitigate demographic decline.

To mitigate the effects of demographic change, Germany will likely make it easier for high- and semi-skilled immigrants to find jobs in the country, especially in areas where there is a lack of qualified personnel. However, cultural problems will remain. The Organization for Economic Co-operation and Development recently warned that while the German immigration system has become more flexible, many companies lack experience in the process of hiring foreigners, and many of these companies consider the regulations to be too complicated. This is particularly challenging for Germany's small and medium-sized companies, which represent the backbone of the nation's economy.

The government will also face challenges in attracting the right profile of immigrants. The current system eases the way for applicants with university degrees to obtain residence permits. Germany, however, will also need to attract workers in occupations for which no university-level degree is required. Recent studies suggest that German companies expect the shortage of medium-skilled workers to be even greater than that of high-skilled workers in the future.

At the same time, the assimilation of low-skilled workers will continue to pose problems for Germany. In the coming months and years, German authorities will likely introduce additional restrictions and controls on EU citizens applying for public benefits in the country. Berlin will likely support projects by other EU nations, most notably the United Kingdom, to prevent the abuse of benefits in Europe's wealthiest countries. Germany will also side with the United Kingdom in its demand to apply temporary bans on the movement of immigrants from new EU member states should the bloc continue expanding.

The situation of asylum seekers will continue to be a source of conflict for the German government. The federal government is under pressure from regional governments, which are pushing for a distribution of refugees according to each state's population and tax revenue. In the coming years, the federal government will have to find ways to mitigate protests from the different German regions and resistance to the arrival of new asylum seekers. Berlin will also have to continuously provide financial assistance to the states that receive refugees. The German government is likely to react in two ways: by implementing new programs to help these immigrants learn the German language and find jobs but also by implementing changes to make deportation easier.

In the short run, Germany's mainstream parties are unlikely to support nationalist groups that propose the end of the free movement of people within the European Union. In the long run, however, the issue will become increasingly problematic. For example, political leaders in the southern region of Bavaria have recently demanded the reintroduction of border controls and accuse Italian authorities of allowing asylum seekers to move from the Mediterranean basin into Northern Europe. At the same time, many Alternative for Germany voters believe that immigrants from Poland and Romania abuse Germany's welfare state and commit crimes.

As the political fragmentation of Europe continues, and as nationalist forces gain strength, the Schengen agreement — which eliminates border controls within Europe — will come under great stress. At a later stage, the principle of free movement of people could also be challenged as countries move to adopt more selective immigration policies. As one of the main recipients of immigrants in Europe, and as the key political and economic force in the European Union, Germany will be at the center of this debate.

Stratfor
YOU'RE READING
Immigration Offers Germany Costs and Benefits
CONNECTED CONTENT
2 Geo |  2 Topics 
SHARE & SAVE

Copyright © Stratfor Enterprises, LLC. All rights reserved.

Stratfor Worldview

OUR COMMITMENT

To empower members to confidently understand and navigate a continuously changing and complex global environment.

GET THE MOBILE APPApp Store
Google Play