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In Europe, refugees from Syria and Iraq have been cramming the ferry-trains heading from Germany to Denmark. But once in Denmark, many refused to get off. Where they really want to go is Sweden, where refugee policies are more generous. When the Danes said no, they hopped off the trains, and began heading toward the Swedish border by taxi, bus, and foot.

Sweden has the most welcoming asylum policies and most generous welfare programs in the European Union. One typical refugee, Natanael Haile, barely escaped drowning in the Mediterranean in 2013. But the folks back home in Eritrea don't want to know about the perils of his journey. As he told The New York Times, they want to know about "his secondhand car, the government allowances he receives and his plans to find work as a welder once he finishes a two year language course." As a registered refugee, he receives a monthly living allowance of more than $700 (U.S.).

Sweden's generous immigration policies are essential to the image of a country that (like Canada) prides itself as a moral superpower. For the past 40 years, most of Sweden's immigration has involved refugees and family reunification, so much so that the words "immigrant" and "refugee" are synonymous there (unlike in Canada).

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Sweden takes in more refugees per capita than any other European country, and immigrants – mainly from the Middle East and Africa – now make up about 16 per cent of the population. The main political parties, as well as the mainstream media, support the status quo. Questioning the consensus is regarded as xenophobic and hateful. Now all of Europe is being urged to be as generous as Sweden.

So how are things working out in the most immigration-friendly country on the planet?

Not so well, says Tino Sanandaji. Mr. Sanandaji is himself an immigrant, a Kurdish-Swedish economist who was born in Iran and moved to Sweden when he was 10. He has a doctorate in economics from the University of Chicago and specializes in immigration issues. This week I spoke with him by Skype.

"There has been a lack of integration among non-European refugees," he told me. Forty-eight per cent of immigrants of working age don't work, he said. Even after 15 years in Sweden, their employment rates reach only about 60 per cent. Sweden has the biggest employment gap in Europe between natives and non-natives.

In Sweden, where equality is revered, inequality is now entrenched. Forty-two per cent of the long-term unemployed are immigrants, Mr. Sanandaji said. Fifty-eight per cent of welfare payments go to immigrants. Forty-five per cent of children with low test scores are immigrants. Immigrants on average earn less than 40 per cent of Swedes. The majority of people charged with murder, rape and robbery are either first- or second-generation immigrants. "Since the 1980s, Sweden has had the largest increase in inequality of any country in the OECD," Mr. Sanandaji said.

It's not for lack of trying. Sweden is tops in Europe for its immigration efforts. Nor is it the newcomers' fault. Sweden's labour market is highly skills-intensive, and even low-skilled Swedes can't get work. "So what chance is there for a 40-year-old woman from Africa?" Mr. Sandaji wondered.

Sweden's fantasy is that if you socialize the children of immigrants and refugees correctly, they'll grow up to be just like native Swedes. But it hasn't worked out that way. Much of the second generation lives in nice Swedish welfare ghettos. The social strains – white flight, a general decline in trust – are growing worse. The immigrant-heavy city of Malmo, just across the bridge from Denmark, is an economic and social basket case.

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Sweden's generosity costs a fortune, at a time when economic growth is stagnant. The country now spends about $4-billion a year on settling new refugees – up from $1-billion a few years ago, Mr. Sanandaji said. And they keep coming. Sweden automatically accepts unaccompanied minors. "We used to take in 500 unaccompanied minors a year," he said. "This year we are expecting 12,000."

Yet Sweden's acute immigration problems scarcely feature in the mainstream media. Journalists see their mission as stopping racism, so they don't report the bad news. Despite – or perhaps because of – this self-censorship, the gap between the opinion elites and the voters on immigration issues is now a chasm. According to a recent opinion poll, 58 per cent of Swedes believe there is too much immigration, Mr. Sanandaji noted. The anti-immigration Sweden Democrats party is now polling at between 20 per cent and 25 per cent.

Sweden is a cautionary tale for anyone who believes that Europe is capable of assimilating the hundreds of thousands of refugees and migrants who are besieging the continent, or the millions more who are desperately poised to follow in their wake. The argument that these people are vital to boost the economy – that they will magically create economic growth and bail the Europeans out of their demographic decline – is a fantasy.

It's really very simple, Mr. Sanandaji explained. You can't combine open borders with a welfare state. "If you're offering generous welfare benefits to every citizen, and anyone can come and use these benefits, then a very large number of people will try to do that. And it's just mathematically impossible for a small country like Sweden to fund those benefits."

Things will get worse before they get better. As Judy Dempsey, a senior analyst at a Berlin think tank, told The Wall Street Journal, "Europe hasn't seen anything yet in terms of the numbers or the backlash."

Meanwhile, Sweden's neighbour, Denmark, has cut the benefits for refugees in half, and has taken out ads in Lebanese newspapers warning would-be migrants to stay home. The Danes don't want to be a moral superpower. They can't afford it.

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About the Author

Margaret Wente is one of Canada's leading columnists. As a writer for The Globe and Mail, she provokes heated debate with her views on health care, education, and social issues. She is a winner of the National Newspaper Award for column-writing.Ms. Wente has had a diverse career in Canadian journalism as both a writer and an editor. More

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