If economies can't adjust to shocks through currency movements, having the people move instead works. And it's happening:
A study by Real Instituto Elcano in February showed 70% of Spaniards under 30 have considered moving abroad. Portugal has seen 2% of its population leave in the past two years. The numbers leaving every year has doubled since 2008. A record 3,000 people are leaving Ireland every month, the highest level since the famine of the 19th-century. Some of them are Poles going home, but many of them are Irish.
Not surprisingly, a lot of them are moving to Germany. More than a million migrants moved to Germany last year, according to the Federal Statistics office, a rise of 13% from a year earlier. The number of immigrants coming from Spain, Greece, Portugal and Italy has risen by between 40% and 45% compared to 2012. But others are heading to wherever they have traditionally found work: Britain for the Irish, South America for the Spanish, and the U.S. for the Italians.
You can take this as a sign of how badly things have gotten, but I was speaking to an EU official earlier today who very much saw this process as a key part of the solution. To him, Europe's lack of internal labor mobility compared with the United States isn't just a fact of life to live with; it's something the EU ought to be actively trying to address. Of course you're not going to find a quick policy fix to the fact that Portuguese people don't speak Finnish. But there's a fair amount that could still be done to promote a single labor market in terms of things like pension portability and occupational licensing. Progress on those fronts would be a poor substitute for flexible exchange rates, but unlike flexible exchange rates it wouldn't run contrary to the core political commitments of the continent.
TODAY IN SLATE
The Self-Made Man
The story of America’s most pliable, pernicious, irrepressible myth.
Does Your Child Have Sluggish Cognitive Tempo? Or Is That Just a Disorder Made Up to Scare You?
Mitt Romney May Be Weighing a 2016 Run. That Would Be a Big Mistake.
Amazing Photos From Hong Kong’s Umbrella Revolution
Rehtaeh Parsons Was the Most Famous Victim in Canada. Now, Journalists Can’t Even Say Her Name.
Transparent is the fall’s only great new show.
Lena Dunham, the Book
More shtick than honesty in Not That Kind of Girl.