Europe is in the middle of the worst refugee crisis since World War II. With 60 million people fleeing their homes, over 1 million refugees are set to try and seek asylum in Europe, this year alone.
David Folkerts-Landau, group chief economist at Deutsche Bank, released a note on Friday November 13 illustrating why Europe acts as “a magnet for waves of refugees” and why this can be positive for the 28-nation bloc’s economy.
Through a series of charts and analysis, Folkerts-Landau illustrated the exact breakdown of immigration levels in Europe at the moment, and how this will have an impact on the EU — specifically Germany.
The number of refugees has hit a 20 year high due to the growing list of conflicts. Deutsche Bank, citing United Nations data, says more than 60 million people worldwide have fled their homes.
“The war in Syria alone, now in its fifth year, has triggered a mass exodus of around 11.5 million Syrians, four million of whom have fled to other countries,” adds the note.
Here is a breakdown of where the refugees come from:
Deutsche Bank says “due to the situations at home, some of which appear quite hopeless, and the prospect of the conflicts dragging on for years to come, more and more people − especially from Syria − have decided to attempt the difficult (onward) journey to Europe.”
Here is the map of how refugees attempt to seek safety across the European Union:
Deutsche Bank highlight how each country takes in a vastly proportion of refugees and Germany accounts for the largest share. The note says “the influx of refugees has raised net immigration to Germany to the record level of more than one million.”
“Among the OECD countries, this trend could put Germany ahead of the United States, traditionally the No. 1 destination country for migrants. For the time being, Germany is likely to remain a magnet for refugees. As a result, the country faces the difficult − and costly − task of integrating the refugees and absorbing the supply shock to the labour market:”
However, Deutsche Bank made it clear that this is an “opportunity” for Germany to “rejuvenate” its labour force:
- The refugees represent an opportunity for rejuvenating an ageing population in Germany, where there is a growing scarcity of labour and the threat of lower structural growth. Without immigration, the country’s economic growth is predicted to drop in the next ten years from its current average of around 1.5% to just 0.5% annually. The stability of the social security systems, especially the pay-as-you-go pension system, would be put to the test.
- The Herculean task of integrating the refugees must be seen as an investment in the future. The refugees are young; the share of those who are younger than 18 years old is 30%.
- As part of a win-win scenario, successful integration offers Germany the opportunity to consolidate its position as Europe’s economic powerhouse. Germany’s appeal as a country of immigration stands to benefit greatly. And more importantly, the necessary changes have the potential to provide German society, in which the preservation of the status quo has become a Leitmotiv, with new momentum for the decades ahead.
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