The rest of Europe may see a crisis as a record number of asylum seekers flood the continent from Syria and other pockets of conflict and poverty. But Germany - the region's economic powerhouse - is also sensing a golden opportunity.

This fast-greying nation of 81 million is facing a demographic time bomb. With a morbidly low birthrate and a flat-lining population, hundreds of schools have already closed. Some neighbourhoods, particularly in the increasingly vacant east, have become ghost towns. For Germans, it has raised a serious question: Who will build the Mercedes and Volkswagens of tomorrow?

Enter a record wave of migrants.

Offering some of the most generous terms of asylum, Germany has become by far the biggest host in Europe for those fleeing dangerous and deteriorating conditions, with more than 800,000 applications expected this year alone. With no sign of the crisis abating as war rages in Syria and Iraq, German leaders are saying they "can cope" with 500,000 more newcomers a year for "several years". Chancellor Angela Merkel is preparing her public for a period of transformation that may alter the very definition of what it means to be a German. Some leaders in the region are sounding the alarm over the threat to national identities posed by the mostly Muslim newcomers. But Merkel is cajoling Germans to embrace a new vision of their country that, in the future, may not be as white or Christian as it is today.

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In a now-viral video, Merkel last week addressed a woman who expressed fear that refugees would bring more Islamist terror. Merkel took a deep breath before replying: "Fear is a bad adviser."

Two Iraqi brothers who have reached Serbia talk to Rachel Smalley about what drives them.

Addressing Parliament yesterday, she said of the newcomers: "They need help to learn German, and they should find a job quickly. Many of them will become new citizens of our country. If we do it well, this will bring more opportunities than risks."

Merkel isn't the only one being pragmatic, with industrial leaders here heralding the flood of working-age migrants. Some German universities are opening their doors to allow refugees into classes for free. The Government is offering "welcome classes" teaching German to migrant children and adults. Germany is rolling out the welcome mat as its unemployment rate has fallen to 6.2 per cent - one of the lowest in Europe. Trade and service companies - from caterers to plumbing firms - are struggling to find new workers, with more than 37,000 trainee positions unfilled, according to the Federal Employment Agency. Couple that with the fact many of the asylum seekers - especially Syrians - are highly educated or skilled workers and include doctors, engineers and architects and suddenly, for Germany, what initially seems like a crisis becomes something else.

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"As the asylum seekers are fairly well qualified, there is a good chance they will become valuable parts of our workforce in the coming years," said Reiner Klingholz, director of the Berlin Institute for Population and Development. In a country projected to shrink by 13.2 million people by 2060, the newcomers could help Germany confront its long-term battle with population decline.

At least that's the view of Oliver Junk, the mayor of Goslar, a town of 50,000 in north-central Germany. Suffering from a net population loss of 4000 since 2002, in recent years, he said, Goslar has had to shut three schools and is now dotted with the "occasional empty house".

But over the past two years, Goslar has also taken in almost 300 asylum seekers. Initially, the newcomers have no choice but to stay. But those who win asylum eventually win the right to move - and Junk said his city is weighing a number of new programmes to persuade them to stay.

- Washington Post-Bloomberg

EU green-card plan

• European Commission President Jean-Claude Junker said a US-style green card system in Europe would kill off illegal smuggling.

• At present non-EU migrants wishing to work in Europe must apply for a work permit with the government of the nation they wish to work in. Juncker's plan would see that system centralised.

• He sees the move as a way of bringing younger workers to the continent to solve the problem of an ageing population.

• EU countries would be forced to accept 160,000 refugees from Italy, Hungary and Greece. Countries would be fined 0.002 per cent of GDP if they refuse. The relocation scheme comes with a carrot of € 6000 ($10,660) for each migrant taken.

• Germany and France are in favour, but Hungary, Poland and Slovakia are bitterly opposed.

- Telegraph Group Ltd