Thursday

21st Feb 2019

EU expects 3mn migrants by 2017

  • Pierre Moscovici finance commissioner presents the Commission's autumn economic forecast (Photo: European Commission)

The European Commission estimates that 3 million people will come to Europe by 2017, in its first assessment of the economic impact of the migration crisis.

It predicted there would be 1 million arrivals in total during 2015, climbing to 1.5 million in 2016, before decreasing to half a million in 2017.

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That would mean an 0.4 percent increase in the EU population, once unsuccessful asylum claims are subtracted.

Commission experts later warned that it is only a "technical assessment”, rather than a forecast or a prediction.

EU finance commissioner Pierre Moscovici said the migrants and refugees could help boost the EU economy.

“There will be an impact on growth that is weak but positive for the EU as a whole, and that will increase GDP by 0.2 to 0.3 percent by 2017," he told press on Thursday, while presenting the Commission's autumn economic figures.

The Commission estimates migrant arrivals would create a short term boost to growth from higher government spending on new aslyum seekers.

That could be followed by a medium-term boost because of an increase in the number of workers available, if the right integration policies are in place, the Commission said.

Moscovici noted that could correct misconceptions about migrants and refugees.

"We can’t say the influx of refugees will have negative effect [on the economy], or a shift of having people kicked out of the labour market”, he said, adding: "If certain conditions are put in place, there will in fact be a fairly positive impact on the economy. That should be comforting."

According to Commission estimates, out of the 3 million new arrivals, half of them are expected to receive protection and the related permit to stay in Europe.

Of those, 75 percent are likely to be of working age, experts said.

The Commission added that, while reliable data on the education level of the migrants are still scarce, "information so far suggests it may be comparatively low."

Who pays?

The bloc’s executive said the overall impact of mass migration on spending by EU countries has, so far, been mild.

But it admits the sharp rise in asylum seekers has put considerable strains on individual member states, including both transit and destination countries.

The impact in transit countries, where migrants pass through en route to preferred destinations, amounts to 0.2 percent of GDP. It is expected to stabilise in 2016.

Here, additional expenditure typically relates to border protection, food, health care, and shelters.

In destination countries the impact is about the same, with a maximum effect of 0.2 percent of GDP. Here, the spending covers social housing, training and education.

For Sweden, which has among the highest share of refugees as a percentage of its population, the impact is closer to 0.5 percent of GDP this year.

Commission president Jean-Claude Juncker said last week that countries which spend a lot on refugees could get breaks from EU deficit rules.

The rules say states must keep their budget deficit under 3 percent of GDP or face fines.

Some frontline states, including Italy and Hungary, which have seen hundreds of thousands of people cross through en route to their preferred destination, mostly Germany or Sweden, have called for the budget leeway.

But Commission experts indicated they want the budget breaks despite not actually spending huge sums on the crisis.

Italy’s migrant expenditure, for intance, amounts to just 0.2 percent of GDP.

For his part, Moscovici told press on Thursday he cannot comment on a decision not yet made.

“We’ll come forward with opinions [on budget leeway] later,” he said.

Juncker in his speech also said that country’ refugee expenditures will be assessed on a case-by-case basis.

Experts say this is crucial, because facts on the ground can change very fast as migrants shift their routes from place to place.

Moving targets

“This is a moving target,” said an expert, giving the example of Slovenia, which had very limited migration when it submitted its budgetary plans to Brussels, but which, in the meantime, became the main EU gateway for asylm claimants.

In Slovenia-type cases, the Commission might take the real costs into account retrospectively.

“We can’t exclude that other member states might be effected,” said an EU official.

"If the effort is sizeable, it will be recognised,” the source said, echoing Juncker’s earlier pledge.

The Commission will now start discussions with member states on the budgetary plans and forecasts, with decisions on deficit breaches due by the end of November.

Europe’s battered economy in moderate recovery

Most EU states will post modest growth in coming years, the Commission predicts. But Greece will continue to struggle, while France, Portugal, and Spain could fall foul of EU rules.

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