ECB’s Lagarde Says Foreign Workers Underpin Euro-Zone Growth

European Central Bank President Christine Lagarde said the influx of foreign workers has provided a critical lift to the euro-zone economy, speaking on Saturday at the Federal Reserve’s annual Jackson Hole symposium in Wyoming. Although migrants made up only about 9 % of the European Union’s labour force in 2022, they generated roughly half of the bloc’s employment growth over the past three years, Lagarde noted. Without their contribution, labour-market conditions would be tighter and output lower, she said. Lagarde estimated that Germany’s gross domestic product would be around 6 % smaller than its 2019 level if foreign labour had not filled gaps created by shorter working hours and real-wage declines. She added that Spain’s relatively strong post-pandemic expansion also owes much to migrant workers. Net immigration pushed the EU’s population to a record 450.4 million last year, offsetting a natural decline in births. The ECB chief acknowledged that the economic gains come amid rising political resistance to new arrivals, with several governments tightening immigration rules in response to voter pressure.