Can Southern Europe Reverse the Tide of Migration?
WHY YOU SHOULD CARE
Because there’s no place like home.
Javi Val is ecstatic. After two years serving bitter coffees and cold croissants in a hotel in Berlin, the 26-year-old Spaniard is finally saying adiós to the cold German winters and coming back to Madrid. Better yet — he’s scored his dream gig as an engineer.
Is it time to go home yet? Almost since the global recession of 2008, the European countries known as the PIGS (Portugal, Italy, Greece and Spain) have bled talented youth, first in a trickle and then in a gush of epic proportions. Like children spurned by an economy that no longer wanted them, the migrants decamped by the hundreds of thousands to northern Europe, Mexico, even Angola. But now some of the PIGS are trying to convince their youth to return, using what economists call incentives and disincentives — like tax deductions for returnees and penalties for those who stay abroad — and what any savvy parent would recognize as bribes and punishments.
The rationale here is simple: Brain drain is terribly costly in the long run, stripping societies of engineers, doctors, academics and entrepreneurs. Even in the short run, Iberian countries have found that out-migration didn’t help them: Instead of sending money back home, their wayward sons and daughters have generally spent their earnings in the U.K. and Germany. The consequences of out-migration, at this point, have become macroeconomic liabilities, says economist João Cerejeira, of Portugal’s University of Minho: “The pension systems of southern European countries will be at risk, and innovation will hurt.”
If Portugal’s scheme is like a dad’s conditional promise — you’ll get an allowance if you obey a curfew — Spain’s is disciplinary.
His country, which has lost almost 4 percent of its population to out-migration over the past three years, is arguably leading the charge. Under the Strategic Plan for Migration approved in March, the government offers several packages of incentives, from a jobs scheme that links Portuguese engineers abroad with employers at home to a program called VEM (meaning “come back”) that offers professional mentorship and funding opportunities for emigrant entrepreneurs, which hopes to launch 3,600 new small businesses over the next five years. Meanwhile, a new Web portal dedicated exclusively to returning migrants offers details on everything from how to apply for social housing to how to enter startup mentorship competitions. The government is spending $3.4 million on this scheme — not very much compared to its $84 billion budget, and not nearly enough, many gripe.
But given the overall economic climate, it’s something, advocates say. Besides, it’s better than Italy, which offers incentives only for academics, or, hey, Greece, which currently offers nada to returnees. “We want to be proactive and pioneer in these matters,” says Pedro Lomba, Portugal’s secretary of state assistant in the cabinet of regional development, “but there is a real sense of urgency and much follow-up to do to see what works.”
If Portugal’s VEM is like a daddy’s conditional promise — you’ll get your allowance if you obey your curfew — Spain’s tack has been rather more disciplinary: It’s “punishing” unemployed people who leave the country for more than 90 days by cutting off their social welfare. No red carpet there. The problem is that many of the jobless people who’ve left Spain, and that’s 72,335 in the past year, have done so to look for work. Should they fail to find it or end up underemployed, they’ll come home to no safety net. Besides, with an economy finally growing again (its GDP is projected to gain 2.8 percent this year), some argue Spain can afford the roadblocks. And while it’s too soon to say whether the carrot-or-stick/love-or-fear strategy is best, last year the pace of emigration slowed from Spain and Portugal — for the first time in a decade among permanent emigrants in the latter — according to those countries’ National Institutes of Statistics.
Even so, the programs have found plenty of critics. Just ask Ferruccio Pastore, who directs the International and European Forum for Migration Research. He notes that the return policies exclude emigrants who have Ph.D.s or engineering degrees but are busy cleaning homes and washing cars in northern Europe. Then again, he notes, “who said immigration policy was a tool for social justice?” Many also argue that all the websites, tax breaks and fines in the world are moot without one big thing: economic growth, which frees up credit for entrepreneurs and gives them a better shot at a decent market, points out João Teixeira, head of Beon, a Portuguese financial consulting company. “They won’t suddenly go back because the economy is getting better,” Val says.
Indeed, there’s still a long way to go. More than half a million Italians now live in London — more than double the population of Florence — while 73 percent of Spanish researchers are actively looking for jobs abroad, according to a study by Madrid’s National University of Distance Education. For the medium term, at least, you’ll probably still be able to walk into a London Starbucks and be greeted by a Portuguese architect washing the dishes, or an Italian designer whose heart breaks every time someone orders a strawberry frappuccino.