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A survey released ahead of an important German Islam Conference in March of this year found that people of Turkish origin in Germany feel like unwanted guests in their home country. Many of these Turkish immigrants, despite living in Germany for decades, simply have not fully integrated and, as a result, feel ostracized.

Given the deteriorating economic climate in the Eurozone, anti-immigration sentiment is on the rise in Europe, as are the feelings, by immigrants, of being unwanted. Our review of this “Trend” will begin with Germany, a country we are currently long via the EWG exchange traded fund.

In Germany, these immigrants are referred to as Gastarbeiter, or guest workers. They are mostly men recruited by the German government in the 1960s and 1970s to meet the demands of a labor shortage after the Second World War. This period, which become known as the Wirtschaftswunder (or economic miracle), saw the active recruitment of individuals from Italy, Greece, Turkey, Portugal, and Yugoslavia for unskilled industrial sector jobs in West Germany.

Turkish citizens quickly held the lions-share of the Gastarbeiter quota, most of whom were given temporary visas for a couple of years. However, what the government didn’t account for was the reluctance of employers to let trained workers leave, nor the desire on the part of the workers to make Germany home. Instead of heading to their home countries with pockets full of D-Marks, guest workers stayed and brought over their families. Children born to Gastarbeiters received the right to reside in Germany but were not granted citizenship.

This immigration story is an important one that plays out on German streets today. Tour any German city and you’re likely to see Kebab stands—a traditional Turkish sandwich like a gyro—which Germans eat like fast food. Or check out any major German publications and you’re likely to see various exposés about integration issues in Germany, the catch-phrase being multiculturalism (Multikulti), defined as the recognition, celebration and maintenance of different cultures or cultural identities within a society to promote social cohesion.

It’s fair to say that such terminology as multiculturalism exists because there is a concerted effort to reduce the fractious relations between Germans and Turks (as well as other minority groups) over political, religious, and cultural differences. Many of these differences stem from the treatment and perception of the Turks as “guests” of Germany, not citizens, since arriving as far back as 50 years ago.

Certainly citizenship is an important mark in defining a society. In the US we have conveniently devised the terms Salad Bowl and Soup Bowl to describe a people with varied foreign roots; most of the original settlers in this country were not refused citizenship based on ethnicity or religion. Yet within historically more homogeneous European countries, like Germany, such definers as ethnicity (especially skin color) and religion can play an important role in determining “Who is German”.

It is under similar pretext (who belongs and who doesn’t) that many European nations have reservations accepting Turkey (a predominantly Muslim country) into the European Union. In 2000 legislation passed conferring German citizenship to German-born children of foreigners who have lived in the country for at least eight years, and in addition made the naturalization process easier, though dual citizenship is not tolerated. Now, any person possessing it by virtue of birth to foreign parents must choose between the ages of 18-23 which citizenship he or she wishes to retain, and forfeit the other.

Today Germany is home to 2.7 million people from Turkish families (of Germany’s 82 million residents), with an estimated population of 3.4 million Muslims. The city section of Kreuzberg in Berlin has such a high concentration of Turks it has been named “Little Istanbul”.

The crux of the Germany’s most profound social problem is that the guest workers who arrived in the postwar years never really integrated. This has carried over in the form of isolated communities but, more importantly, has had massive repercussions on successive generations. These include children who aren’t exposed to the German language in the household, and therefore are a step behind their German peers as they begin their education, and complex identity issues resulting in integration handicaps.

From the initial movement to bring unskilled laborers to Germany in the 1960s and 1970s, the German landscape has changed. Today, Germany recruits outside its borders for highly skilled workers, generally in the sciences or high-tech fields. Unemployment, which has been high in Germany, especially in the “former” East Germany, today stands at 7.5% (av. Eurozone 7.6%), with Turkish unemployment rates generally double the national average.

The German-Turkish debate as it plays out in politically, economically, and culturally on the street is an important one to follow. Telling is a quote from Turkish Prime Minister Recep Tayyip Erdogan at a mass rally held for Turkish immigrants during his visit to Cologne in February 2008, in which he said: “Assimilation is tantamount to a crime against humanity”. German Chancellor Angela Merkel quickly responded saying she didn’t share the PM’s view. Was it really just a slip of his tongue?

We’ll be monitoring economic fundamentals alongside a host of risk factors (like immigration) in our ongoing evaluation of our long position in the German etf, EWG.

Matthew Hedrick
Analyst