Intra-European Migration Could Lead to Permanent Divisions

Posted on April 12, 2014 by wikistrat

Wikistrat recently concluded a three-week strategic simulation called “The EU in 2030″ in which our analytic community looked into the future of the European Union. One scenario suggested that labor migration from Eastern to Western European member states could lead to permanent cultural and economic division. A summary is provided here.

Gross domestic product per capita in the EU (2008)

The migration of workers from Eastern and Southeastern European nations benefits the more advanced economies of Western Europe. Not only are they able to maintain their high standards of living, but some host countries, particularly Germany, continue to expand exports.

Yet increased migration challenges the social fabric of Western European societies. While legally limited in their ability to control intra-European migration, many of these states’ immigration and naturalization laws are, at least partially, based on blood and heritage.

Migrants from East and Southeast Europe earn less on average and in many cases lack the opportunity for naturalized citizenship. They are developing a resentment toward their new “homes.” Lacking the incentive to build a permanent life in Western Europe, many send remittances instead to their home countries. Resentment against them is rising in turn. Nationalist and Euroskeptic parties are becoming more influential. The lack of political leaders who can convincingly explain the benefits of immigration, and the rising resentment toward Eastern and Southeastern migrants, can be expected to block reform of the blood-based naturalization systems.

Because of the migration, Eastern and Southeastern European nation suffer a population decline. It are the young and the skilled who emigrate. This development negatively affects their economic growth and thins their tax base. As a result, their budget problems will worsen over time while skill shortages in their national labor markets are unresolved.

While the Eastern and Southeastern peripheries of the European Union thus become increasingly dependent on aid, Western European countries are less willing to provide it. Joining the eurozone becomes a far-fetched prospect. Witnessing the struggles of Italy and Greece to manage their economies without national monetary policies, Eastern and Southeastern European member states decide against adopting the single currency.

The countries most disadvantages under this scenario are Bulgaria and Romania. Due to the large gap in income levels between these countries and those in Western Europe, more young and skilled Bulgarians and Romanians are likely to emigrate westwards. The fertility rate in 2010 was 1.3 for Romania and 1.5 for Bulgaria. This is even below the OECD average of 1.8, which indicates that even without outward-migration the labor forces of these former Soviet satellite states will shrink drastically over the decades to come.

The countries least disadvantaged are Germany and The Netherlands. Both have aging populations and will be in dire need of labor to sustain their export-driven growth strategies.

Wikistrat Analysts Dr. Robert M. Cutler, William Gingher, Tilman Pradt and Dr. Klaus Prettner contributed to this scenario.