'Fortress Europe' resists calls to open its borders
Katrin Bennhold/IHT
Thursday, July 22, 2004
AACHEN, Germany When Harianto Wijaya received Germany’s first green card in August 2000 and found himself paraded across the country as a symbol of the government’s commitment to relaxing its immigration policy, the 29-year-old Indonesian computer programmer was confident he would get permanent residency within a year or two.
Four years later — and two weeks after the German legislature passed a watered-down version of the immigration law — Wijaya’s patience has run out.
This week Wijaya, whose green card is proudly exhibited in a history mu seum in Bonn, took the exams he hopes will get him a place in a business school in France or the United States.
‘‘The green card is a good story for my grandchildren, but it didn’t really help professionally,’’ he said, sipping lemonade in the technology center in this city in western Germany, where he used to work for a wireless start-up called Aixcom. ‘‘I just can’t see myself getting the permanent residency. And I don’t want to find myself escorted off to the airport one day’’ — as happened to a fellow university stu dent whose permit had expired.
Wijaya’s tale reflects a paradox haunting all of Europe: the Continent is aging and in dire need of replenishing its pool of labor, but the political will to open the borders of Fortress Europe remains half-hearted.
A complex mix of high unemployment, post-September 11 security concerns and a long and sometimes bitter colonial history in many western European countries has fed a reluctance among European citizens to embrace foreigners. This is in stark contrast to immigrant countries such as the United States — which, in spite of tightening their borders after September 11, have historically integrated foreigners into the work force at a more rapid pace.
Even setting aside arguments of moral responsibility and cultural diversity, this recalcitrance is depriving Europe of precious human capital that could translate into more economic growth and productivity, economists say.
Claude Bébéar, chairman of the supervisory board at Axa, the French insurance company, and head of a government-commissioned study of equality of opportunity in the French labor market, sees a twofold challenge: Europe needs more people to work and pay taxes; it also needs to hold down the average age of the working population, which tends to be linked to the innovative capacity of an economy.
‘‘If Europe wants to keep its place in the world it needs a younger population, and that means more immigration,’’ Bébéar said in a telephone interview. ‘‘At the same time, we need to use the potential we already have on the Continent. There is a significant unemployment problem among young immigrants — a lot of talent goes to waste.’’
Tapping his extensive contacts in French industry, Bébéar has mobilized Axa and nine other large companies to work with SOS Racisme, an association fighing discrimination in France, to identify and recruit minority applicants with university degrees.
The result at Axa this year: some 10 of 50 new hires were members of ethnic minorities — all of them, according to Bébéar, highly motivated.
Europe’s demographic realities mean the Continent needs many more such schemes. According to the European Commission, which has only just published the first of what are now intended to be annual reports on immigration and integration, falling birthrates and rising life expectancy mean that Europe’s work force will start shrinking from 2010 onward. At current employment rates, the work force of the 15 countries constituting the European Union prior to the May 1 enlargement would decline by 14 million over the next 25 years, trimming gross domestic product in the region by 7 percent, according to calculations by the Organization for Economic Cooperation and Development.
Already, labor shortages in industries ranging from engineering to construction have crept up in several countries. With the proportion of people over 65 set to double in coming decades, to almost 50 percent of the population, the Continent’s tax-financed pension and health care bills could rise by as much as 8 percent of GDP, the commission estimates.
Immigrants, by contrast, tend to be young and dynamic. A recent study by the Home Office in Britain showed that they contribute about 10 percent more to public coffers than they take out in health care, education and other state services. According to Patricia Hewitt, Britain’s secretary of state for industry, ethnic minorities have a net worth of £32 billion WHAT MEANS?PLS a year, or $59 billion, and twice as likely to start up businesses. They also tend to be less choosy about jobs and their location, which adds flexibility to the labor market. Yet immigrants represent less than 4 percent of the western European labor force population, compared with a 15 percent share of foreign-born workers in the United States.
The commission is urging drastic medicine: in May it published a report by independent experts that recommends that all 25 European Union members boost annual net immigration by 45 percent over the next two decades, to just under 1 million, while lifting the employment rate to 75 percent from 64 percent. The payoff, the report says, would be a projected rate of annual economic expansion averaging 2.2 percent and productivity growth of about 1.5 percent, compared with 0.8 percent and 1 percent respectively if such measures are not taken.
‘‘One look at the figures is enough to show that increasing employment rates won't be enough in itself to counteract the effect of the aging population,’’ said Antonia Mochan, the commission’s spokesperson for employment and social affairs. ‘‘The projected shortage of labor will need to be addressed in other ways, and one is through properly managed immigration.’’
European governments have made some efforts, certainly. The Netherlands committed itself to raising the employment level of ethnic minorities to 54 percent by 2005, and Denmark is reserving 3.5 percent of public sector jobs for employees from immigrant origins. France and Britain have set up a fast-track work permit system to provide companies short of labor with the employees they need. But most such policies have so far fallen short of the needed overhaul.
In Germany, Europe’s largest economy, the introduction of the green card also signaled a shift towards a looser immigration policy. For the first time, companies were allowed to hire foreign specialists as long as they were willing to pay them at least £37,000 per year. Facing a shortage of some 7,000 engineers and computer specialists in 2000, the government offered 20,000 five-year permits to information technology specialists abroad.
In a measure of the broad distrust that plagues such efforts, only 12,000 foreigners took up the government offer. Meanwhile, it took four years of domestic squabbling between the Social Democrat-led coalition government and the opposition Christian Democrats, and successive amendments weakening the original draft, to pass — last Friday — a law that replaces the green card with new rules in 2005.
Martin Steppler, co-founder of Aixcom and Wijaya’s former boss, sees more pitfalls than incentives in the new rules. By more than doubling the originally prescribed minimum salary, he said, the new legislation has effectively closed the door for Germany’s Mittelstand — the thousands of small and medium-sized businesses that create about two-thirds of all jobs in the country — to tap into the increasingly globalized pool of highly skilled labor.
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