A Mediterranean Community of Human Capital

Europe’s shrinking workforce is weighing on its productivity and welfare systems. Meanwhile, its southern Mediterranean neighbours currently produce growing numbers of graduates whom domestic labour markets cannot absorb. This column makes the case for a Mediterranean Community of Human Capital, built around joint investment in training, skills, and mobility, which could expand the skills base, reduce brain drain, and rebuild trust with Europe’s closest neighbours.

In 1951, six European countries decided to pull their coal and steel together so that economic interdependence would prevent conflicts among them.  By 2050, Europe’s coal and steel could be people. The old continent faces a shrinking working-age population and widening labour shortages that neither higher employment rates nor automation can close on their own. Meanwhile, its southern Mediterranean neighbours currently produce growing numbers of graduates whom domestic labour markets cannot absorb. Treated as a common opportunity, these trends create the basis for a cooperation model based on mutual benefit. In this column, we make the case for a Mediterranean Community of Human Capital, built around joint investment in training, skills and mobility. 

An unprecedented convergence of interests between Europe and its southern neighbours

The EU fertility rate fell to 1.34 children per woman in 2024. Eurostat projects that, without migration, the Union’s working-age population could decline by around 20% by 2050. Increasing labour participation of women and older people does not offset these projections (European Commission 2024a), while robotisation only offers limited solutions in labour-intensive professions such as care work (Wright 2023, Mann and Pozzoli 2024). Europe also lacks the technical workers needed to develop automation (United Nations 2024).

By contrast, Egypt’s population is expected to grow by 36% by 2050, from 118.4 to 161.6 million people, and Algeria’s by 31%, from 45.4 to 59.6 million (United Nations 2024). Student numbers are expanding accordingly, from 1.3 million in Morocco to 3.7 million in Egypt. That said, birth rates are already starting to fall throughout the region, making this a limited window of opportunity (Ouadah-Bedidi et al. 2026).

Graduate unemployment remains persistently high across the Maghreb: It stands at 19.8% in Morocco, more than six percentage points above the national rate; at 33.6% in Egypt, compared with a national rate of 7%, and at 25% in Tunisia, where 71% of graduates report seeking opportunities abroad (Ben Youssef et al. 2024). 

This demographic evolution is now strong enough that Europe’s most migration-restrictive governments are moving to accommodate labour-market needs. After building her campaign on anti-immigration discourse, Italy’s Giorgia Meloni set quotas for 452,000 foreign workers between 2023 and 2025, and close to 500,000 between 2026 and 2028. Between 2015 and 2024, Hungary’s Viktor Orban issued 322% more residence permits. The Social Democratic government in Denmark issued three times more residence permits for employment per capita than France in 2024.

Turning complementarity into an opportunity before it turns into a liability

The question for Europe is no longer whether these movements will occur, but whether it organises them, or risks aggravating pressures on both shores.

Firstly, recruiting workers in the South can deepen shortages in origin countries, leaving them to bear the cost of training workers who ultimately contribute elsewhere. Morocco trains 2,100 doctors annually and loses 600 and Algeria loses 2,000 for 3,000 trained; in Tunisia more doctors leave each year than are trained. Similar losses affect engineering, IT and accounting: we estimate departing doctors and engineers alone to cost Tunisia roughly €270 million a year in training losses and Morocco €200 million. A European strategy based purely on attracting already-trained workers would not only weaken local economies and essential services, but also erode trust in Europe, strain partnerships, and deepen existing grievances.

Secondly, the depletion of southern graduates will intensify competition among European states over a limited talent pool, as Europe faces a projected workforce shortfall of 15.63 million workers by 2050. This makes skilled labour an asset for southern countries, thereby strengthening their bargaining position. With the talent race already on its way, Europe therefore has an interest in shifting from recruitment to partnership, through co-investment in training and fairer sharing of costs and benefits.

Thirdly, increasing the talent supply without matching skills to actual labour-market demand can reinforce both skills mismatches and unemployment. In 2025, 41.4% of employed non-EU citizens with tertiary education worked in low- or medium-skilled occupations, compared with 20% of nationals, while non-EU citizens faced an unemployment rate of 12.3%, against 5.2% among nationals. This highlights both skills underutilisation (with many skilled workers working below their qualification level) and weaker labour-market integration. 

What would a Mediterranean Community of Human Capital look like?

Therefore, the first principle of such a framework would be sector targeting and joint planning. Europe currently lacks a coordinated prospective picture of its skills requirements. A European shortage map should identify needs by country, region, sector, and occupation. Mapping training capacities on the southern shore against labour shortages is essential to identifying complementarities prospectively and bridging the skills-employment gap.

The second pillar would be co-training, to train more, better, and together. European governments should co-finance additional training capacity in partner countries, thereby expanding the overall skills base available to local labour markets and mobility to Europe. This includes partnerships between companies and Mediterranean vocational training institutes, jointly designed curricula, dual or common qualifications, and language training. Graduates could follow different pathways: remaining in their country of origin, moving to Europe, or participating in temporary and circular mobility schemes. The private sector has a central role in identifying labour-market needs, shaping training content and facilitating pathways into employment. The most developed model along these lines is the Global Skill Partnership, developed by the Center for Global Development, in which training is jointly designed and split between a local labour market and a mobility track. Five European pilots are already running, including a Tunisia-France partnership in plastics manufacturing, while similar initiatives are increasingly emerging across the region.

The third principle is skills recognition and portability, as the non-recognition of diplomas remains one of the main administrative barriers to mobility (alongside work-authorisation procedures). In priority sectors, mutual recognition arrangements and common accreditation frameworks should therefore be strengthened, with jointly developed curricula where possible. Europe has already begun moving in this direction through Talent Partnerships, bringing together member states and partner countries to identify sectors of shared interest and support skills development, qualification recognition and organised mobility. However, these mechanisms remain country- and sector-specific and have yet to operate at the scale required to bridge the gap. 

Finally, the financial return on human capital should be shared. One model could borrow from the International Federation of Association Football (FIFA), in which the club recruiting a player compensates the institutions that trained them. An electronic skills passport could document the worker’s training history, while the contribution received by the training country could be mandated for reinvestment in the education system. This system would allow today’s mobility to finance the next generation of workers.

Additionally, debt-for-training swaps could provide an innovative financing instrument, allowing European creditors to cancel part of a partner country’s debt in exchange for a commitment to invest in training and skills development. Germany and Italy have already used debt-for-development mechanisms with Mediterranean partners. Our calculations suggest that converting 10% of relevant bilateral claims held by Germany, France and Italy could mobilise roughly €584 million for Morocco, €207 million for Tunisia and €540 million for Egypt (El Karoui and Gaüzère-Mazauric 2026: 146).

Development banks and the private sector would play a central role in financing such initiatives building on existing successful projects. The European Bank for Reconstruction and Development (EBRD) has conditioned loans on skills commitments in Egypt, while the French Development Agency co-finances nine public sectoral institutes in Morocco. Such investments in human capital can simultaneously strengthen training capacity and infrastructure in partner countries and support long-term economic returns for creditor countries. 

The community could rely on a joint steering council of governments, development banks, training institutions and employers from both shores – while sectoral working groups would identify priority skills needs and shape training programmes. The European Commission could serve as the central facilitator, building on its current role.

Conclusion

Europe’s shrinking workforce is weighing on productivity and welfare systems. Hospitals need doctors and nurses; EPR nuclear projects need technicians and engineers. Meanwhile, the Southern Mediterranean holds what Europe will need most: its youth. By mapping and matching labour needs to training capacity across both shores, a Mediterranean Community of Human Capital could expand the skills base, reduce brain drain and rebuild trust with its closest neighbours. Better-organised pathways could in turn support social and regional integration and shift the migration debate away from crises such as Ceuta.

The conceptual leap has already been taken: co-training and mobility initiatives are multiplying across the region, and EU policy towards its Southern Neighbourhood is moving the same way. The Pact for the Mediterranean signalled a strong willingness to rebuild cross-shore relations around shared interests, with skills and jobs at the heart of the agenda.

The real question is whether this new approach translates into balanced, equal partnerships. Scaled to market needs and backed by sufficient political momentum, it could turn this interdependence into a durable partnership. By 2050, human capital may become for the Mediterranean what coal and steel were for Europe in 1951: a common foundation for cooperation.

Source : VOXeu