Christine Lagarde, President of the European Central Bank (ECB), emphasized the vital role of migrants in the European Union"s economy during a recent address to central bankers. Speaking on Saturday, she stated that the EU "cannot grow" without the contributions of foreign workers, who accounted for half of the region"s labor market growth over the past three years despite making up only 9 percent of the total labor force in 2022.
Lagarde highlighted that without migrant labor, Germany"s GDP could be approximately 6 percent lower, and Spain"s economic recovery would lack its current momentum. The ECB chief noted that employment across the eurozone has increased by over 4 percent since 2021, even amid the most significant interest rate hikes in decades.
Addressing concerns about migration"s impact on social cohesion, Lagarde acknowledged the political tensions it can create but insisted on its importance in mitigating challenges posed by a declining birth rate and a demand for shorter working hours. This influx of workers, she argued, has helped companies boost output and alleviate inflationary pressures, even as wage growth has not kept pace with rising prices.
As discussions on immigration policy continue to evolve in Europe, Lagarde"s remarks may influence how policymakers approach labor shortages and economic growth in the coming years. The ongoing debate about the balance between economic needs and social challenges remains a critical issue for EU leaders.
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