Lagarde singled out Germany and Spain as examples. Germany’s GDP could be about 6 % decrease in the present day with out migrant labor, whereas Spain’s sturdy restoration additionally “owes a lot” to overseas employees, she mentioned. Throughout the eurozone, employment has expanded by greater than 4 % since 2021, at the same time as central bankers pushed by means of the steepest price hikes in a era.
The ECB president argued that migration has performed an important function in offsetting Europe’s shrinking beginning price and rising urge for food for shorter working hours. That, she mentioned, helped corporations increase output and damped inflationary pressures at the same time as wages lagged behind costs.
However Lagarde additionally acknowledged the politics. Internet immigration pushed the EU’s inhabitants to a document 450 million final yr, at the same time as governments from Berlin to Rome transfer to limit new arrivals below stress from voters flocking to far-right events.
“Migration may, in precept, play an important function in easing labor shortages as native populations age,” Lagarde mentioned. “However political economic system pressures could more and more restrict inflows.”
She confused that Europe’s labor market has emerged from current shocks in “unexpectedly fine condition.” However she cautioned in opposition to assuming that dynamic will final: demographic decline, political backlash and shifting employee preferences nonetheless threaten the eurozone’s resilience.
