ECB’s Lagarde claims that foreign workers have strengthened the euro zone economy

Christine Lagarde, president of the European Central Bank, stated on Saturday that the euro zone’s economy has benefited from a surge of foreign workers in recent years, which has helped offset reduced real earnings and shorter working hours.

Despite falling births, migration into the European Union drove its population to a record last year, but governments are limiting new entrants in response to unrest at home.

Despite a growing inclination for shorter workdays and a decline in living standards in certain industries, Lagarde cited an increase in the number of workers from outside the 20 euro-sharing nations as a factor that bolstered the bloc’s economy.

“Foreign workers have accounted for half of its growth over the past three years, even though they represented only about 9% of the total labor force in 2022,” Lagarde stated during a speech at the annual symposium of the U.S. Federal Reserve in Jackson Hole, Wyoming. “Without this contribution, labour market conditions could be tighter and output lower.”

She said that Spain’s robust economic recovery since the end of the COVID-19 epidemic was also largely due to the contribution of foreign labor, and that without foreign workers, Germany’s gross domestic output would be about 6% lower than in 2019.

For the fourth consecutive year, net immigration overcame a natural population fall, bringing the EU’s population to a record 450.4 million last year.

However, local residents have reacted negatively to this, increasingly supporting far-right parties.

For instance, the new government in Germany has halted resettlement and family reunion initiatives in an effort to win back support from people who were attracted to the Alternative for Germany.

Since taking office, President Donald Trump of the United States has increased the number of illegal immigration arrests, tightened down on illegal border crossings, and denied legal status to hundreds of thousands of migrants.