Germany needs to attract hundreds of thousands of migrants every year for the next 10 years to tackle a deficit in skilled labourers, according to a leading economics research institute.
An ageing population and lack of workers in sectors including engineering and the medical profession means the country faces a crisis in paying pensions and providing healthcare, according to Julio Saaverdra, an executive board member at the CESifo group, Germany's largest economics research institute.
More than one-fifth of Germans are now aged 65 or older, making it the second-oldest country in the world, falling only behind Japan. It also has one of the world's lowest birth-rates, with an annual average of just 8.42 births per 1,000 inhabitants.
A 2011 study by the Institute for Employment Research in Nuremburg, Germany's labour force is predicted to drop by around seven million by 2025.
"There is a demographic problem in Germany. We had our baby boom around 1965 and they will be retiring in about 10 years. Germany is going to face a huge shortage of labour and needs to import hundreds of thousands of people each year just to keep the pension system going," says Saaverdra.
In recent years, the government has introduced reforms to make it easier for migrants to settle and work in Germany.
In 2012, Berlin introduced the Blue Card scheme which simplified procedures for hiring highly-skilled immigrants. The card allowed migrants with a university degree and an annual salary of more than €35,000 to apply for permanent residency.
Official statistics body Destatis reported Germany's highest level of immigration in 20 years in 2013, with 1,226,000 people coming into the country and 789,000 leaving. However, Saaverdra says there is still a chronic shortage in certain sectors.
"We need plumbers, carers for the elderly, nurses, even doctors," he says. "Germany is looking anywhere. If you have the right skills it doesn't matter where you come from - the EU, Latin America, Africa, Asia."
Saavedra says that the country's elderly population are leaving jobs which are going unfilled. The government last year reduced the retirement age to 63 for certain longer-serving employees in a move which sparked criticism from business groups.
The country is also trying to address the problem by promoting more childbirths. Germany offers a generous child benefit scheme, with parents receiving up to €215 per month if they have large families to provide for.
Despite such policies, Saaverdra argues that long-term, large-scale immigration is the only way to tackle the problem.
"We need migration. Even if more people go to universities and get into these careers, even if more women work and people work longer, even if you do all these things it still will not be able to sustain the German economy in 10 years," he says.
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