The stagnating West European population combined with the prosperous economic development of the European Community (EC) generate strong economic incentives for immigration. The drastic political changes in Eastern Europe generate emigration pressures. There are a variety of problems with economic and political integration of migrants. The paper argues that immigration can compensate for demographic losses due to the decline and ageing of the European labour force. Economic theory further predicts welfare gains from free factor movements, which should be reaped as long as social costs and adjustment costs are not prohibitive. An active European migration policy is recommended to achieve this aim.