The Secret Everyone Knew—But No One Was Supposed to Say (And why it slipped out in the middle of nowhere, Wyoming)

A short note from Jackson Hole, Wyoming.

During her speech at the annual Jackson Hole Economic Symposium, European Central Bank President Christine Lagarde blurted out what policymakers on both sides of the Atlantic have quietly understood for two years: the war in Ukraine has been an unexpected windfall—not just for the United States, but for Europe, too.

Here is the sound-bite that will live on:

“The large post-pandemic inflow of foreign-born workers has helped Europe bring inflation down without a sharp growth sacrifice.”
She added that without those workers, Germany’s GDP would be roughly 6 % smaller than it was in 2019, and that Spain’s surprisingly strong recovery is “largely thanks to foreign labor.”

That is a remarkable confession—especially when you consider where it was made.

Why Jackson Hole?
Every August, the Kansas City Fed herds the world’s top monetary officials to Grand Teton National Park—think snow-capped peaks, trout streams, and more elk than people. The meeting started in 1978, when the Kansas City staff discovered that then-Chair Paul Volcker loved fly-fishing. They pitched him: “Come out, talk policy in the morning, fish in the afternoon.” Volcker bit, a tradition was born, and the symposium has dictated market narratives ever since.

So, what did Lagarde really tell us?

1. Europe had already slammed the door on most non-European migrants.
   After the 2015 refugee crisis, Brussels paid Turkey billions to keep Syrians on its soil, and by 2021 asylum approvals from Syria and Afghanistan had slowed to a trickle.
2. The “foreign-born workers” who rescued Europe could only have come from one place: Ukraine.
   When Russia invaded in February 2022, more than six million Ukrainians crossed into the EU within three months; another three-plus million followed over the next year. That is roughly one Ukrainian in four.

   
3. The Ukrainians who left were the cream of the labor force.
   • Young: most were between 15 and 35.
   • Educated: about 80 % had spent at least some time in college.
   • Culturally proximate: white, Christian, Slavic—integration in months, not decades.
   • Willing to work: refugees who need a paycheck tomorrow don’t bargain for premium wages.

     

Germany alone has taken in over two million; even Sweden, with a smaller intake, now hires Ukrainians to staff restaurants and care for the elderly, edging out traditional suppliers such as Romania.

Europe’s demographic math suddenly looked a lot better. Aging societies that had fretted about shrinking workforces woke up to an influx of highly productive labor that arrived almost overnight—and on humanitarian grounds, so no one had to call it “economic migration.”

The losers
Ukraine itself.

• Population: from 45 million pre-war to perhaps 32 million inside the country today (and that figure includes Russian-occupied territories).
• Military losses: leaked Ukrainian General Staff numbers—if they hold—show 1.72 million dead, missing, or deserted since 2022.
• A generation hollowed out: one in ten working-age Ukrainians is gone—either buried or earning euros in Berlin, Warsaw, or Madrid.

The grim takeaway
War is tragedy for the battlefield country and a balance-sheet event for everyone else. The United States arms industry, energy exporters, and dollar-funding markets have all booked tidy gains. Europe paid higher energy prices for a while, then quietly harvested a million-plus young workers to offset its own demographic decline. And Ukraine? It lost territory, lives, and—most cruelly—its future taxpayers.

None of this was supposed to be spelled out in public. But in the thin mountain air of Jackson Hole, Christine Lagarde let the unspoken slip.