Written on 28 January 2025.

In several countries, immigration is currently one of the hottest political issues, particularly in the United States, Germany, Britain and France. The French online magazine Atlantico discusses economic implications of immigration for host countries. 

Atlantico: What are the main findings of recent studies carried out in Denmark and the Netherlands on the net tax contribution of immigrants within the EU, depending on their country of origin?

Nicolas Pouvreau-Monti: There are traceable and significant differences between immigrants' contributions over the course of their lives. The net fiscal balance over a lifetime is based on several variables, notably the reason for immigration: labor immigration, family immigration or asylum. Labor immigration contributes more than asylum, which is divorced from any economic logic, depending on the level of qualification and also on the region of origin, which has a lot to do with the cultural distance between the society of origin and the host societies.

In the Dutch study, the authors, including Jan H. van de Beek, were able to establish that Western immigrants make a positive contribution over a lifetime of around €25,000 per person, while non-Western immigrants present an average annual cost, i.e. a total fiscal cost over a lifetime of around €270,000, with even lower maxima for specific classes in certain countries of origin. One of the really salient aspects concerns this gap according to region of origin, which seems to be a very important explanatory variable.

Jean-Paul Gourévitch: There's a real imbalance between the costs and benefits of immigration, but in terms of all the criteria. It's not just a question of tax and social contributions. It also concerns all the goods the country brings in terms of health, security and education.

These studies are based on extensive work and wide-ranging comparisons, and not on a simple comparison between what immigrants bring in fiscally and socially, and what they pay out fiscally and socially. The deficit is around 2 to 3.5% of the country's GDP. I myself arrived at this figure in a study I published for Contribuables associés. The only notable difference is that Denmark is beginning to reap the dividends of its policy of restricting immigration and of its choices linked to selective, work-based immigration. The Netherlands has not yet begun to reap the dividends of its policy.

Nicolas Pouvreau-Monti: The findings of these studies raise questions about the ability to choose immigration. There are variables that strongly differentiate economic integration trajectories, depending on the country of origin, the reason for entry and the level of qualification.

This calls for immigration to be considered like any other public policy, which should aim to minimize disadvantages and maximize benefits for society as a whole for which governments are responsible.

Today, the difficulty is that a large proportion of immigration is legal immigration, with no economic corollary or correlation with the needs of the host society. These questions also arise in France. The difficulty is that our country doesn't have such a fine, transparent statistical system.

Concerning the integration trajectories of immigrants and their descendants, in the first generation, there is a significant gap between the employment rate of immigrants from South-East Asia and the employment rate of immigrants from Algeria. The gap between the two categories is of the order of fifteen points higher in terms of employment rates. These differences in tax contributions have a great deal to do with the differences in levels of activity and qualifications, which are also difficulties encountered by France. This raises the question of the resources and policies needed to take action.

The net fiscal balance is a fairly interesting and relevant indicator for approaching all the dimensions of integration and measuring the adaptability of an immigrant population. It's not just about accounting. It also covers educational trajectories, integration into employment and thus into society.

Should these studies and the figures on immigrants' tax contributions lead political leaders in Europe to review their strategy and methods? Could France, in particular, learn from these studies?

Nicolas Pouvreau-Monti: The conclusions of these studies call into question the levers of action available to politicians to draw concrete political conclusions. Today, in our law, there is no possibility of privileging one type of immigration according to geographic origin, with the obvious exception of intra-EU immigration under a free movement regime. 

These studies call into question the need to give ourselves the means to choose immigration, including on a geographical level. There is a principle of non-discrimination in our law which may make this measure difficult to apply. In the future, student or work-related immigration from South-East Asia, for example, could be encouraged. The employment rate of South-East Asian immigrants in France is almost 20 points higher than that of Algerian immigrants (75% vs. 56%). This also echoes the findings of Danish and Dutch studies.

Jean-Paul Gourévitch: Figures and studies show that selective immigration based on work, much less on family and not at all on asylum, has a positive impact. These results could lead countries to be much more restrictive when it comes to granting asylum and accepting refugees. By favoring labor immigration, this lowers the overall cost of immigration.

These studies show that Denmark, the Netherlands and France face exactly the same problems. But Denmark is ahead of us.

In view of France's budgetary difficulties, can the studies carried out in Denmark and the Netherlands point the way to reforming France's economic and financial strategy in relation to its migration policy?

Nicolas Pouvreau-Monti: The question of the fiscal impact of immigration is one of the major blind spots in today's debate on public finances in France. France is unique in that its immigrants are generally less integrated into the labor market and poorer than elsewhere in Europe. Immigration to France contributes less to public spending and consumes more. This reality is amplified as migratory flows themselves increase. Immigration has long-term structural budgetary repercussions. From the point of view of sound public finance management, this calls for a rethink of our immigration policy. The impact is quite obvious. The difficulty is that there is no single best estimate of the cost of immigration. No single figure is an absolute truth. When trying to assess the net cost or net fiscal balance of immigration, many criteria come into play. Immigration to France today is less integrated into the labor market and involves poorer people than elsewhere in Europe.  This invites us to rethink our model.

(highlights by editor)

Background

France is one of the developed countries that takes in the fewest immigrants. The proportion of immigrants in France is below the European average, according to Insee ( Institut national de la statistique et des études)  France's 10.7% is well below Luxembourg's 50%, Malta's 28%, and around 20% in Germany, Austria, Belgium, Cyprus, Ireland and Sweden.

France is also at the bottom of the OECD rankings  (New Window). In 2022, new immigrants to France represented 0.4% of the country's total population, compared with more than ten times that figure in Luxembourg (4.4%), Iceland (3.4%), New Zealand (3%), Canada (1.1%) and Germany (0.8%). In this ranking, France is just ahead of the United States, whose new immigrants will represent just 0.3% of the population in 2022.

Today, according to Insee, immigrants represent 10.7% of the population living in France. Half of them come from Africa, a third from Europe and almost 14% from Asia.

The proportion of immigrants in France's population has more than doubled in a century, almost tripling from 3.7% in 1921 to 10.7% in 2023. Some of these immigrants have or will have French nationality, so the proportion of foreigners in France is slightly different: foreigners will represent 8.2% of the total population in 2023, compared with 3.9% in 1921.

This increase is linked to three waves of immigration. The first took place in the 1920s, after the First World War, and the second during the Trente Glorieuses, after the Second World War. In both cases, France needed labor and went abroad to find it. After the first wave of immigration, many immigrants left again, but after the second, they stayed in France, where they had built up their lives, had children, etc. The third wave of immigration is more like the second wave of immigration.

The third wave of immigration is more recent, more progressive and more global. It is taking place against a backdrop of rising migration worldwide, linked in particular to the fact that it is much easier to travel today than it used to be, and to study in another country.

Written on 07 January 2025.

Without a source of cheap energy, Europe is lost. Energy costs are economically the equivalent of a sales tax. At every stage of production, distribution and consumption of goods and services, energy is required, sometimes a lot, sometimes less. Whenever a good or service changes hands, sales tax is due. The higher the tax rate and the more often the good changes hands, the higher the tax revenue.

At every stage in the life of a good or service, energy costs become due. The more expensive energy is, the larger becomes the cumulative share of the sales proceeds absorbed by the energy suppliers.  Conversely, the more expensive energy is, the lower is the residual income remaining for the economic subjects.

Europe's energy problem: Since the end of cheap energy supplies from Russia, the residual income of Europeans after deduction of the energy “tax” has fallen drastically. Several European economies are stagnating. Europe is caught in an energy trap. Has Europe understood its dilemma?

No, not really. Europe is telling itself that it is fighting a vital battle to save the climate by striving for decarbonization, and that this battle is only temporarily throttling the economy until wonderful forms of renewable energy will again catapult the economy to new heights.

Just as Germany hoped for the miracle of the V-weapons during the Second World War (which never came), Europe is now hoping for the miracle of renewables.

And they are indeed coming. Slowly, drop by drop. New wind farms here, new solar panels there, better batteries, lofty talks of a hydrogen future. A lot is indeed happening, but it's not enough.

What is happening is not sufficient to save the climate. Nor is it enough to free Europe's economy from economic paralysis.As long as Europe is shackled by high energy prices, the continent will continue to fall behind.

High production costs will gradually drive the old brands of European industries out of the global mass markets and relegate them to the luxury segment. Only German discounters and French fashion houses will probably continue to retain their dominant role as proof that Europe is hampered by energy supplies but not by creativity.

Europe needs cheap energy if it is not to go under economically. Renewables are nice, they help with decarbonization, with saving the climate, but they do not solve the problem of the economy's hunger for energy. They are too little, too expensive, often too impractical.

For the competitors - Asia, America, Australia, Russia - decarbonization and saving the climate is at best one goal among others. In principle, growth comes before climate. From their perspective, Europe's efforts to show the world how to save the climate may seem rather funny, touching. 

Where and how will Europe obtain enough cheap and carbon-free energy? Nuclear power is controversial and has been feared at least since Chernobyl and Fukushima. Nuclear fusion is still the subject of future novels, along with tidal power plants and the like. Europe needs a technical breakthrough, but this is nowhere in sight. Some suspect that the oil and gas industry is working hard to keep a tab on better renewables that could spoil their business, They certainly have a powerful ally for the next four years. "Drill, baby, drill!"

 On 7 January 2025, the German newspaper Süddeutsche Zeitung observed with apparent satisfaction "Deutschlands Strom wird grüner"  (Germany's electric power is greening). On 10 January the |French newspaper L'Humanité titled "Les 4 raisons qui conduisent l’Allemagne au bord de la panne de courant" (The four reasons why Germany is approaching a blackout). The article mentions surging prices of electric power due to a combination of  the seasonal doldrums reducing available wind power and its expensive substitution by running coal and gas fired power plants.

"Wind, solar and co. will have already generated around 60 percent of Germany's electricity by 2024 - and the trend is rising every year. In addition, electricity from renewables is significantly cheaper than nuclear power. According to the Fraunhofer Institute for Solar Energy Systems, while large-scale solar and wind energy can be produced for between 4.1 and 10.3 cents, nuclear energy from new nuclear power plants costs between 13.6 and 49 cents per kilowatt hour, including dismantling, disposal and other costs."

FOCUSonline

On 14 January 2025 Peter Kalmus wrote:

"Humanity already has the technology to quickly transition away from fossil fuels; solar has been the cheapest way to produce electricity for half a decade now. But ultra-wealthy people are blocking the transition. Perhaps they don’t wake up with intent to destroy the planet, but they’re invested in maintaining the extractive system that gives them godlike power and privilege and is destroying the planet."

"According to a study by the International Energy Agency (IEA), nuclear energy is on the verge of a global comeback in the face of rising demand for electricity. Interest in nuclear energy is greater than at any time since the oil crisis in the 1970s. More than 40 countries are striving to expand nuclear energy, the IEA announced in Paris."

The French Court of Auditors is sounding a new alarm about the financial risks associated with the development of new second-generation (conventional fission) nuclear power plants, both on French soil and abroad, that the wholly owned state subsidiary Edf is building. As early as 2020, the Court made a series of recommendations for monitoring to be conducted, particularly on the costs and timetables for building the plants. Recommendations that remained unfulfilled with the result of producing bottomless pits that absorb public resources, plants that risk not achieving adequate profitability and a whole series of inefficiencies also in the organization of controls and contracts. The document released in recent days paints a merciless picture.

Rzeczpospolita (PL)
 The bus has left without us
Bogusław Chrabota, editor of Rzeczpospolita, is disappointed: 

“So there is no chance that Europe will join the chase with the rest of the world. Its process of musealisation is too far advanced. What remains then? An open-air museum offering tourism, low-level academic education (here we will still have an advantage over part of the world for a while) and organic agricultural products. Poland can offer vodka, sausages and raspberries - provided, of course, there are enough hands to do the harvesting. The bus has left without us, ladies and gentlemen, and the illusion that we can still get on it is simply naïve.”

Update

European business circles are less afraid of Donald Trump than of American productivity
For these business circles, Donald Trump remains unpredictable, except that he remains permanently pro-business. By contrast, American productivity is accelerating to the point of wiping out entire economic sectors. This productivity is far more dangerous.

The productivity gap between America and Europe is nothing new; it began to widen almost 50 years ago, roughly, with the collapse of the Berlin Wall and the arrival of a world open to trade. The Americans did what they had to do to take advantage of international competition, while at the same time knowing how to protect themselves from draughts when there were any.

Written on 23 January 2025.

 Powerful figures in the Russian government apparatus are reportedly becoming increasingly unhappy with the government's subservient relationship with China, which is seen as "turning the country into a raw materials colony" and threatening an economic crisis.

The VChK-OGPU Telegram channel has an interesting piece about concerns within "government clans of the Russian Federation" about Putin's strategy towards China, which is being promoted by a "dominant pro-Chinese group" within the Russian administration.

3/ According to a source, "the failure of the policy of the last two years and the impossibility of getting out of the [Ukraine] conflict on terms acceptable to the dominant group became obvious – hence, the conflict will continue to the detriment of the rest of the elite groups, the population and the interests of the country.

"The rest of the elites are becoming increasingly aware of the ‘colonial’ nature of relations with China - supplying the bulk of extracted resources to China at cost price (and sometimes even below cost price, if we take into account the cost of loans in the current situation) and imports from China at a 2-3 times inflated price.

"In fact, the entire population and business of the Russian Federation is now working to support the military operation and fuel the Chinese economy - 50x50%, all profits from Russian resources are generated in the Chinese economy.

Their concern is understandable, but it’s too late now. Russia already sold its soul to China, Iran and North Korea.

They made their bed. Now they can lie in it.

Written on 05 January 2025.

Ein hochrangiger ehemaliger Militärbeamter hat sich schockiert und ungläubig über das Ausmaß geäußert, in dem der nationale Nachrichtendienst und der Kommunikationsapparat der USA auf Dienste von Unternehmen angewiesen sind, die Elon Musk gehören.

Nach seinem Kommentar zu diesem Thema in der New York Times in dieser Woche sprach Generalleutnant Russel Honoré am Samstag mit MSNBC This Weekend über den wachsenden Einfluss des reichen Mannes auf die US-Politik und seine Verbindungen zu ausländischen Regierungen.

"Ich weiß nicht, wie wir in dieses Schlamassel hineingeraten sind, indem wir einen Vertrag mit einem Unternehmen, SpaceX, abgeschlossen haben, das sowohl Raketen für uns baut als auch die Kommunikation kontrolliert.

Wir haben das Nationale Aufklärungsbüro, wir haben das Weltraumkommando, wir haben die NASA... Wieso zum Teufel haben die Leute in Washington unsere Geheimdienste und unsere Kommunikation einem privaten Unternehmen unterworfen, warum zum Teufel haben wir das getan?“

Honoré schloss mit der Warnung, dass die Bedrohung nur „noch schlimmer werden wird“, nachdem er zuvor auf das nationale Sicherheitsrisiko anspielte, das durch Musks angebliche Kommunikation mit dem russischen Präsidenten Wladimir Putin und dem chinesischen Präsidenten Xi Jinping besteht...

“Elon Musk told China’s state television, ‘I’m very confident that the future of China is going to be great and that China is headed towards being the biggest economy in the world and a lot of prosperity in the future.’

Musk made those comments in 2021, in an interview with China Central Television.

Four years on, with Musk ensconced in the heart of government, accessing sensitive government systems and classified information with apparent impunity, his Chinese ties are prompting growing concern.

Last month, Russel L Honoré, a retired US army general, used a New York Times column to highlight business interests including $1.4bn in loans from Chinese banks used to build a Tesla factory in Beijing. The headline was stark: “Elon Musk Is a National Security Risk.”