Germany’s Refugee Policy Could Turn the Migrant Crisis into Economic Victory

The Syrian refugee crisis has been plaguing European economies over the past couple of years. It has handed these countries an influx of foreign nationals without the necessary infrastructure to handle them. Recently with the terror attacks in Paris, the crisis has transformed from one of economic ramifications to a more serious problem with national security in mind, particularly for these countries such as Germany, France, and the Nordic countries whose high quality of living attracts foreign asylum-seekers. While countries like Denmark have pursued policies aimed towards keeping asylum-seekers out, Germany has been much more lenient in its acceptance of refugees. In fact, an article by Der Spiegel argues that Germany’s relaxed policy actually allows it an economic benefit by energizing the country’s labor force. 

German chancellor Angela Merkel is pursuing an “open-armed” policy towards the refugees flowing into the country. Her policy essentially states that Germany will be allowing refugees to stay in the country as opposed to returning them to their country of first entry. This goes against the Dublin Accord, which states that refugees are to be processed for asylum in whichever Schengen Zone nation they cross into first (this rule obviously places an undue burden on countries like Greece and Italy). The move is uncharacteristically bold for Merkel, however it establishes a strong tone for the rest of the European Union, for which Germany has emerged as a leader of sorts both economically and in the face of the refugee crisis.

Despite its humanitarian overtones, Germany’s open-armed reaction to refugees should not be seen only as an act of good will. This map by the Washington Post shows how the German population has been declining, and how this has had negative ramifications for Germany’s economy. Compare this trend to a country like Great Britain, which has seen vast population growth and is struggling to maintain its population at a steady amount despite taking on refugees. The disparity in population growth between the two countries could perhaps explain why their different approaches to refugees have led to strained relations between the two countries. Foreign labor has always been an important part of maintaining German economic growth, however sources suggest that the country’s already high immigration rate is still not enough to fill this void. The integration of these refugees into the economy could provide Germany with the economic boost they need while also improving Germany’s reputation as a humanitarian country.

Merkel’s plan could prove to be problematic. For one, it is yet to be determined how effectively these foreign nationals will be able to integrate themselves into the economy – although 77% of the refugees are of working age, many of them do not speak German – an obvious hurdle in the challenge to contribute to the German economy. Additionally, Merkel faces internal political opposition both domestically and from other EU countries that do not share the same sort of eagerness to accept refugees that the German chancellor is now pressing on the other member nations. Following recent terror attacks in Paris, these concerns have been complicated even more by questions of security surrounding the refugees. Despite these challenges, many hold confidence in the notion that these migrants will give Germany the boost that it needs to continue the growth of its sprawling economy. 

These foreign laborers could serve to benefit the German start-up sector as well. While its primary industries are still based around manufacturing and engineering, Germany’s Berlin based start-up scene is vibrant and could serve to grow with this increase in the population. Large start-ups like Soundcloud and Blacklane are only a small part of the vibrant community that has grown around Berlin in recent years. Additionally, by serving as a role model for other European countries, Germany could encourage other burgeoning European economies to open their doors to refugees and allow migrant laborers contribute to their small business.