Tuesday

16th Oct 2018

Countries ask for budget flexibility over migrant crisis

  • Migrants rescued in the Mediterranean sea. (Photo: consilium.europa.eu)

EU countries facing extra costs due to an influx of migrants are trying to obtain budget flexibility from the EU. But other countries and EU officials meeting in Luxembourg on Monday (5 October) have been wary in their response.

Austria, supported by Italy, Malta and Luxembourg, the country that currently chairs the Council of EU ministers, said that the EU should be less strict with the budget deficit of countries who will spend more than expected to face the migrant crisis.

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"Some countries in the eurozone are really affected by the cost of the refugees," Austria's finance minister Hans Joerg Schelling said before a Eurogroup meeting on Monday. "We only want, as is usual for cases of a catastrophe, these costs to be removed."

"I don't think it would be right if we said we were unable to reach a zero structural deficit due to the costs of the refugee crisis and then still got punished by the Commission," Schelling explained.

"Why not?", Malta's minister Edward Sciclun said when asked if he supported the idea. "It’s a big burden for the countries affected, Malta included but particularly Italy, and we should help in any way we can".

Other countries like Greece, Hungary, Croatia and Germany could also be face a significant impact on their public finances.

EU budget rules allow member states to avoid budget disciplinary procedure in the case of exceptional circumstances.

The European Commission said it would present proposals on the issue but finance commissioner Pierre Moscovici said Monday it was "not on the agenda" yet.

"We are conducting a legal, financial and economical analysis and we will be ready to discuss it when the moment comes," he told reporters in Luxembourg.

Case-by-case approach

Some countries expressed reluctance to decree a specific rule over the migrant situation.

"Our opinion is that we should be very careful," Belgian minister Johan Van Overtveldt said, warning that rules should not be changed "whenever something happens in the world."

Germany's Wolfgang Schaeuble said he was concerned that countries that "have not been particularly involved in the refugee question so far" try to benefit from a circumstantial flexibility.

In any case, the Eurogroup president Jeroen Dijsselbloem insisted that "there are major differences between countries. For some countries it has a very large impact also in budgetary terms, and on other countries it has hardly any impact."

"It certainly should be a case-by-case approach," he said.

Off the record, officials also suggested that granting budget flexibility could distract member states from fiscal discipline.

The cost of migrants "is less of a huge issue if you think that it amounts to 2 percent to 3 percent of GDP," a eurozone official said. "The really decisive issue would be: are you slipping into a deficit deficit procedure because of this cost."

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