ROME – When history repeats itself, it is rarely gentle. Today, as in the era of colonialism, tens of thousands of ambitious young people from Europe’s periphery are escaping the old continent in search of better opportunities in America, Africa, and Asia. But, unlike in the colonial era, the human outflows are not compensated by inflows of natural resources or precious metals. European emigrants used to contribute to the glory of their homelands; now, their exodus is contributing to Europe’s decline.
In an extreme attempt to address his country’s job shortage, Portuguese Prime Minister Pedro Passos Coelho recently urged his country’s young unemployed to emigrate to Portugal’s former colonies, such as Brazil or Angola. Last year, for the first time since 1990, Spain was a net exporter of people, with 31% of emigrants going to South America. Even in countries with no imperial past, but with an enduring migratory tradition, like Ireland, the brain drain to Australia and North America is accelerating.
The severity of Europe’s economic downturn, deficiencies in the euro’s design, and ill-conceived fiscal-austerity measures are all fueling the exodus. But the main driver is culture, not economics. Europe’s high degree of linguistic fragmentation does not allow the eurozone to absorb a self-inflicted crisis, so people move out of the currency area rather than within it.
Labor mobility within a currency area represents a key adjustment mechanism to preserve the effectiveness of monetary policy against asymmetries in regional shocks: in theory, workers from the eurozone’s shrinking periphery should flow to the expanding core. In practice, the language barrier impairs this safety valve. Thus, southern Europe is losing its best talent, northern Europe is struggling to fill its job vacancies, and all of Europe is becoming poorer.