JACKSON HOLE, Wyoming (Reuters) -An influx of foreign workers has given the euro zone's economy a boost in recent years, helping offset shorter working hours and lower real wages, European Central
Euro Zone Economy Boosted by Influx of Foreign Workers, Says Lagarde
The Role of Foreign Workers in Economic Growth
JACKSON HOLE, Wyoming (Reuters) -An influx of foreign workers has given the euro zone's economy a boost in recent years, helping offset shorter working hours and lower real wages, European Central Bank President Christine Lagarde said on Saturday.
Migration Trends and Economic Impact
Migration into the European Union pushed its population to a record last year despite declining births but governments are placing curbs on new arrivals in response to domestic discontent.
Political Reactions to Immigration
Lagarde listed a rise in the number of workers from outside the 20 countries that share the euro as a factor that supported the bloc's economy despite a growing preference for fewer working hours and a fall in living standards in some sectors.
Country-Specific Economic Insights
"Although they represented only around 9% of the total labour force in 2022, foreign workers have accounted for half of its growth over the past three years," Lagarde said in a speech at the U.S. Federal Reserve's annual symposium in Jackson Hole, Wyoming. "Without this contribution, labour market conditions could be tighter and output lower."
She said gross domestic output in Germany would be around 6% lower than in 2019 without foreign workers and added Spain’s strong economic performance since the end of the COVID-19 pandemic also owed much to the contribution of foreign labour.
The EU's population rose to a record 450.4 million people last year as net immigration offset a natural population decline for the fourth straight year.
But this has come at a cost of political backlash from local voters, who have increasingly turned to far right parties.
Germany's new government, for example, has suspended family reunification and resettlement programmes as it seeks to regain support from voters drawn to the Alternative for Germany.
In the United States, President Donald Trump has stepped up arrests of immigrants in the U.S. illegally, cracked down on unlawful border crossings and stripped legal status from hundreds of thousands of migrants since his inauguration.
(Reporting By Francesco Canepa; Editing by Emelia Sithole-Matarise)
