EU 'will need immigrants' as working population falls
By Ambrose Evans-Pritchard in Brussels
 

THE number of people of working age in the European Union is falling so fast that a vast inflow of immigrants will be needed to keep the economy running into the new century and prevent the collapse of the pension system.

 Within 25 years, the EU will need up to 159 million immigrants to keep the current ratio between workers and the increasing number of retired people, according to a study by the United Nations Population Division.

 Europe is caught in a demographic squeeze on two fronts. The overall population is not only declining - with losses of five million expected by 2025 and 40 million by 2050 - but it is also ageing at an unprecedented rate. Italy and Germany have the lowest fertility rates in the world, with their populations falling by 0.9 per cent and 0.8 per cent respectively.

 Britain has a positive birth rate and is closer to North America in its demographic structure but even Britain will face a serious imbalance early in the century that will have to be offset by immigration or an overhaul of the retirement system.

 Italy's low birth rate means a likely fall in population from 57 million today to 41 million in 2050, a much faster collapse than the decline in the Roman Empire. While the number of workers in Italy will halve, the number of pensioners will almost double because of higher life expectancy. The twin effect will play havoc with the pension system. 

Michael Teitelbaum, a demographer at the Alfred P Sloan Foundation in New York, said: "There is a different cause in each country. In Italy it's because women are delaying marriage and stretching the generations over more years. In Germany it's a long-standing collapse, and nobody really knows why."

 The estimates are in Replacement Migration: Is it a Solution to Declining and Ageing Populations, to be published in March. The report says Germany will need 3.4 million immigrants a year to maintain the "support ratio" of four to one between workers and retirees, a level that would alter the ethnic and cultural mix. Italy will need 2.2 million a year.

 The need for immigrants could be reduced by raising the retirement age but the imbalance in the worst affected countries - Spain, Sweden, Austria, Portugal, Greece, Italy and Germany - is so acute that mass immigration is almost unavoidable.

 Joseph Chamie, head of the UN's Population Division, said: "I accept that all solutions are going to be unpopular but allowing migrants to come in is the only alternative to structural reforms that are simply too painful to contemplate."