Refugee Crisis: What it means for Germany’s economy

Comparing refugees to swarms and cockroaches, the media has not acted kindly to those escaping poverty and war from Syria.

Many, including Janet Daley from The Telegraph, believe that Europe cannot handle such an influx of migrants and that they will only add to “the pressures on their hospitals and GPs’ surgeries, and of shortages of housing and school places”.

Despite so many popular discourses maintaining similar views, evidence emerging from Germany suggests anything but a strain on the economy.

With Germany expected to receive up to 800,000 refugees and migrants by the end of 2015, many economists agree that this influx can only be good for the economy. This is largely due to the fact that Germany, like the UK, has an ageing population. With an average age of 44.5 years, the influx of young migrants are expected to turn around Germany’s precarious demographic situation and help pay the pensions of tomorrow, whilst filling the country’s workforce hole.

As reported by the Independent, the high influx of refugees from Syria are expected to contribute to significant growth boost in Germany, with Deutsche Bank forecasting the country’s GDP to come in at 1.9% in 2016.

Andrea Nahles, the German Labour minister, addressed sceptics saying;

“We will profit from this, too, because we need immigration. The people who come to us as refugees should be welcomed as neighbours and colleagues.”

This profit can be seen in a report, stating that those 6.6 million living in Germany in 2012 with a foreign passport paid an average $4,127 more in taxes and social security than they took in social benefits, leading to a surplus of 22 billion euros that year.

However, it is important to recognise that this evidence might take years to be acknowledged by critics, with well-known German futurologist, Horst Opaschowski stating; “It will only be in the long run that Germany can prove the pessimists wrong — and the economists right.”


Safiya Bashir on 30/11/2015
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Safiya focuses on business and political stories for UK Investor Magazine. Her interests include international development, travel and politics.