Coronavirus and travel in the EU
In 2018 tourism generated EUR 782 billion in the EU. Earlier this year Germany and other EU members imposed many travel restrictions to control the spread of COVID-19. The necessary lockdown measures hit the tourism sector hardest. The World Economic Forum (WEF) has forecasted a decline of 38% in Europe’s tourism revenue. Now the lockdown measures are being slowly eased. German Foreign Minister Heiko Maas recently announced that the country would lift its travel ban from June 15, 2020. The Schengen area website confirms that most travel restrictions to and from 31 member countries have now been lifted. These include the UK, Iceland, Norway, Liechtenstein and Switzerland.
Tourism businesses in the EU are partially resuming operations amidst new hygiene safety regulations. Travel is being permitted within countries and across some international borders in the EU. These pockets are being called ‘travel bubbles’. Travel in Germany has resumed for EU members. However, the country remains out of bounds for the majority of foreign nationals wanting to visit for business or leisure.
In April 2020 Germany’s workforce stood at 44.8 million. The country’s Federal Statistical Office reported a year-on-year drop in employment for the first time in a decade. Despite this Germany’s appetite for migrant workers remains strong. Deutschland absorbs nearly 250,000 migrants every year. In light of Germany’s ageing population the country’s policymakers are considering a revision of immigration laws. To better shape Germany’s population growth the WEF suggests re-looking at economically-motivated immigration from countries outside of the EU.
The WEF expects EU economies to contract. The numbers of migrant workers moving within the EU will fall. This may necessitate the drafting of Germany’s ‘specialised workers immigration law’ to attract migrants with fewer qualifications. On the other hand in 2019 Germany issued 84% of all ‘Blue Cards’ to highly qualified immigrants. The country’s employment opportunities and promise of better living standards together seem to create a win-win situation in migration.
Remittances from Germany
The German Federal Office of Migration (BAMF) reports that about 75% of immigrants arriving in Germany are less than 40 years old. A majority of them are low-skilled or unskilled workers. International migrants make up 14.9% of Germany’s population, compared to a world average of 3.3%. Germany is the fifth largest remittance sending country worldwide, with annual remittance outflows exceeding $25.4 billion. The largest volumes of remittances are sent via money transfer operators, and increasingly from mobile apps. One of these is the Ria money transfer app, which is fast becoming a household name in the EU. It is noteworthy that remittances constitute only a fraction of migrants’ earnings. This is an indicator of the important contributions of migrant workers to the German economy. Cross-border mobility is vital to both home and host nations.
With the easing of travel restrictions global remittance flows will recover gradually. The World Bank estimates that in 2019 annual remittance flows to low and middle income countries (LMOCs) exceeded $554 billion. In 2020 global remittances are projected to decline by 19.7%. However the situation will quickly improve, as remittances (and migrants) are extraordinarily resilient.
Lifting of Germany’s travel ban is great news for the 26 million workers in the EU travel industry. Germany has weathered the COVID-19 pandemic better than most of its neighbours. However, as Fritzi Kohler-Geib of KfW Bank puts it, “the path out of the Corona Valley is long”. The speed of recovery depends on many factors, including state-sponsored economic stimuli. The German Economic Institute (IFO) forecasts that the country’s economy may shrink by 6.6% in 2020, followed by a 10.2% growth in 2021. This is assuming no second wave of the pandemic hits. Businesses are expecting to return to normal within 5 to 16 months. Berlin may stimulate the national economy with a rescue package of EUR 1.1 trillion. This will guarantee loans for businesses, benefits for workers on reduced hours, and direct support for the hardest-hit firms. Nevertheless, for those of us residing out of Europe, it looks like that trip to Deutschland will have to wait for now.
About the author:
Hemant G is a contributing writer at Sparkwebs LLC, a Digital and Content Marketing Agency. When he’s not writing, he loves to travel, scuba dive, and watch documentaries.