I'm in Germany, with two sickeningly bilingual kids (sickening because they are natives speakers in German to a degree I'll never be, but actually I'm quite proud of them) who go to school in a two-language school using immersion. Immersion works perfectly as long as it's introduced early enough - ideally at the start of primary school - and makes up at least a quarter of the school curriculum. But it still needs to be backed up with grammar lessons in both languages.
Grammar teaching and conversation practice are both useless without the other. If you teach phrases without grammar, there is no underlying structure which would enable people to form their own sentences and adapt language chunks. If you teach grammar without activating the language through conversation, it's nothing more than a particularly boring mathematical exercise with zero function apart form passing exams.
From what I can tell, language lessons in Germany have changed considerably over the last 20 years, but they're still not conversational enough, IMO. There's very little emphasis on spoken English. This may be because many many German teenagers go to the States or Canada (or the UK or any other English-speaking country) for six months to a year and learn the language fluently at 16. So they've already had the grammar in school, and then living with a host family in the country 'activates' that fluency. Compare that to the typical 'language exchange' in the UK, when kids go to the partner country for a week or two. In that time you can achieve very little apart from establishing that people do indeed speak this language in reality.
DD1 went to France for three months last year when she was 15. We arranged it individually, but it was a part of a programme supported by the school. She spent the whole of the first month in shock, failing to understand most things and finding it all a bit freaky away from us, then she turned the corner and came back absolutely fluent in colloquial and formal French. She's now doing the equivalent of French A-Level (and reading L'étranger
, no getting away from that).
The two major problems with this kind of exchange in the UK are A. people are ridiculously overprotective with teenagers and unwilling to let them go abroad for longer than a week or so B. foreign languages are regarded as so unimportant that people can't think of any reason to learn them apart from being able to order food in a restaurant, and why would you go to school abroad to just learn that?