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EU: Report Says Immigration Will Not Solve Labor-Market Problems

Brussels, 29 May 2002 (RFE/RL) -- The European Commission today released a study that says immigration alone "can never counterbalance" the labor-market problems caused by a rapidly aging European Union population.

Presenting the study, commission employment spokesman Andrew Fielding said even the immigration of significant numbers of young adults would not be enough to reverse the trend of an aging EU population. He said the only solution to the EU's labor-market problems are continued reforms.

"Immigration is reform-neutral as far as the EU is concerned. It doesn't change the need for reform of labor markets now and pension systems now, regardless of the scenario," Fielding said.

The commission's report says that total population size in the EU is "a rather inert variable" that reacts very slowly, even to assumed "extreme combinations" of radically increased immigration and birthrates. The report says the EU population will only grow significantly if fertility rates reach 1.8 children per family -- compared to 1.4 today -- and annual net immigration doubles from 680,000 to 1,360,000.

Extrapolating from current trends, the report estimates that in 15 years, one-third of working-age Europeans will be 50 years or older.

Fielding said the labor-market reforms necessary to accommodate this trend must concentrate on increasing EU-wide mobility of the workforce, helping workers retrain and build up new skills as needed, and ensuring more participation from women and older workers.

On pension reform, Fielding said the commission would conduct a review of EU member-state pension-reform plans.

EU experts also say only a small share of current immigration contributes to filling specific gaps in the EU labor market. Kostas Fotakis, an official with the European Commission's employment directorate, said limited, targeted immigration is helping the EU to meet some high-tech-sector needs.

"Some [migrants] are of [a] high level and they're coming to meet [the] needs in fast-growing sectors of new technologies. Of course, their contribution is positive because they introduce a dimension of flexibility in the labor market and they also introduce an element of higher productivity. This type of immigration is, of course, particularly interesting for the [European] Union as the needs in the high-tech sector are growing," Fotakis said.

But, Fotakis said, such immigration also has the effect of discouraging the economy from restructuring. He said the positive effects are short-lived because immigration is an "unproductive" method of lowering production costs.

Fotakis said the EU's troubles are compounded by the fact that recent immigration has largely been driven by external factors such as wars and crises and has not been guided by EU labor-market "demands."

"But we [can't] ignore that the bulk of migration is supply-side, provoked by the supply. We have a graph in the report where you see that there is a very stable pattern of evolution of migration in the 1990s. For instance, we have the war in Yugoslavia: We had in the beginning of the 1990s people coming from Eastern Europe. So, any particular problem in the world might give rise to a wave of migration which is not something that is coming from the demand side [of the EU labor market]," Fotakis said.

Fotakis added that instead of relieving pressures on the EU labor market, such supply-side immigration raises additional problems, such as the need to integrate the new arrivals and provide them with education, housing, and social security.

According to most recent EU statistics, more than 13 million people -- or 3.5 percent of the total EU population -- are foreign nationals. The share of foreign nationals is the highest in Austria, at 9.3 percent, and Germany, at 6.7 percent. Some 3.5 million of the foreign nationals resident in the EU come from the candidate countries, 1.9 million from the former Yugoslavia, 2.3 million from North African countries, and just over 1 million from the rest of Africa. Asian countries account for about 2.2 million recent immigrants.