Immigration, debt and the sorrows of young Italy In an age of debt, indifference over where a country's residents come from is not reasonable It took two months, several fights, the best thinking of three political parties and a scolding from 87-year-old President Giorgio Napolitano to get Enrico Letta sworn in as Italy's new prime minister last weekend. Mr Letta's first few hours on the job made clear why Italy has had such a hard time filling it. He told leaders in Paris, Berlin and Brussels that Italy wanted to maintain fiscal discipline but needed "space for growth." In other words, Italy needs both austerity and stimulus, more spending and more saving, its cake and the eating of it. Markets have been receptive and an interest-rate cut by the European Cental Bank has buoyed Italy further, but the country's problems run deep. Its growth in gross domestic product per capita has been the weakest of all countries in the OECD over the past decade, according to a report released by the Paris-based club of mostly rich nations on Thursday. Italy, in fact, is contracting. Real GDP has fallen every quarter for almost two years. Moody's, the credit rating agency, announced this week it was keeping a negative outlook on Italy's debt. Unemployment is at 11 per cent, youth unemployment at 38 per cent. Government debt as a percentage of GDP had been on a slow downward trend between 1996 and the eve of the financial crisis of 2007-2008, but it has now increased to 127 per cent, or about €2tn. Considering that the two decades before the crash saw boom times and the top earning years in the baby boomers" life cycle, you might say Italy could have come out of the crash better. Christopher Caldwell That is not necessarily true. Italy's biggest economic problem often goes unmentioned. It is not just debt but the interaction of debt with the most severe demographic implosion in Europe. What The Sorrows of Young Werther , Goethe's tragic love story, offered to the 18th century - a brand-new way to become profoundly sad - the 2011 Italian census offers to the 21st. In 1950 Italy was one of the world's 10 most populous countries. It was bigger than Pakistan and twice the size of Vietnam or Egypt. Today, Italian women have on average only about 1.4 children apiece. There are half as many weddings in Italy as there were in the early 1960s. Deaths have outnumbered births for decades, and the native-born population is shrinking fast. If Italy's population shrinks too fast, per capita debt may well be too steep to service, even if total debt is at levels it has handled comfortably before. To expect the country to pay its debts as it did decades ago is to expect an 85-year-old man to drink the way he did at university. Italy's only hope of replacing its falling native population in the near term would be through immigration. And indeed, a good way to measure how fast Italy's demographic profile has been changing is by looking at the growth of its foreign-born population, which accounts for all its meagre overall population growth. Italy's foreign population (a number that excludes foreign-born people who take Italian citizenship) has tripled since the 2001 census, from 1.3m to 4m. That means Italy is importing 1m foreigners every three or four years to replace its disappearing natives. Whether or not this is a problem for Italy is for Italians to say. But importing immigrants is no solution to Italy's rising per capita debt. Immigrants are less educated on the whole than the Italians they replace, so they add less value, at least initially. They export a good part of their savings via remittances. And often, new expenses are required to ready the workplace for them, such as Italian language classes or legal counselling. Much commentary about immigration to Europe is written as if no reasonable person could possibly care who, specifically, a country's residents are and where, specifically, they come from. In an age of debt this indifference is not reasonable. No matter Italy's demographic make-up decades from now, it would be quite natural for the "new generation" of multi-ethnic Italians to ask why they should pay for a decadent "old generation" that carried out its fiscal misdeeds before they (or their parents) were even in the country. Another problem is that Italy is the land of Dante's The Divine Comedy and the Sistine Chapel. It might be possible to convince an American or an Australian to believe (or to say) that a big arrival of migrants will be a cultural "enrichment." It is a harder case to make in Italy, even in the 21st century. Immigration may enrich Italy in many ways, but is unlikely to do so culturally. It is just as unlikely to do so fiscally. And the idea that "space for growth" is necessary after a programme of debt consolidation that got under way barely 18 months ago is a sign not that Italy is ready to try new approaches but that it is running out of room to manoeuvre. The writer is a senior editor at The Weekly Standard