In their last economic forecast European Union officials have put a positive economic ‘halo’ on the bloc’s refugee crisis, predicting that the 3 million migrants expected by 2017 would provide at least a small lift to the European economy.
“The arrival of large numbers of asylum seekers would require increases in public spending to manage the influx – spending that would provide a stimulus to the European economy,” the Commission said.
There would also be an additional positive impact from the increase in workers, “provided the right policies are in place to facilitate access to the labor market,” the news release continued.
The report acknowledged that the European recovery has been slow. And it warned against expectations of a rapid turnaround because of challenges that include the slowdown in China and regional tensions created by a standoff with Russia over Ukraine.
Predicting that the economy of the 19-country eurozone would grow 1.6 per cent for this year as a whole, followed by 1.8 per cent in 2016 and 1.9 per cent in 2017, the report attributed the impact partially to the migrant influx.
The forecast predicted even slightly better growth in all three years for the broader 28-member European Union, which includes countries that do not use the euro, like Britain and Hungary. Those two nations are among those that have resisted the commission’s urging that all European Union members share the burden of absorbing the migrants to relieve pressure on front-line states like Italy and Greece, where many of the refugees enter Europe.
The projections in Thursday’s report support a statement made in September by the commission’s president, Jean-Claude Juncker, that migration could be an antidote to looming labor woes in Europe, where an aging population threatens economic growth. Migration should be a “well-managed resource” rather than a problem, Juncker said in his State of the Union address to the European Parliament.
Thursday’s forecast also acknowledged the benefits, at least temporarily, of low oil prices and of the European Central Bank’s bond-buying stimulus program.
Valdis Dombrovskis, the European Commission’s vice president for the euro currency and social issues, said Thursday in a statement accompanying the report that European governments needed to take “advantage of these temporary tailwinds” to carry out overhauls and help stabilise national finances.
“This is important,” he said, “particularly against the backdrop of a slowing global economy, continuing tensions in our neighbourhood and the need to manage the refugee crisis decisively and collectively.”
Pierre Moscovici, the commissioner for economic and financial affairs, told a news conference shortly after the numbers were made public that migration would have only a “weak” impact on growth, but one that would be “positive for the EU as a whole.”
The forecasts still needed to be checked over the coming months, Moscovici said. But the initial estimate “challenges some of our misconceptions” about migration, he said, apparently referring to the idea that asylum seekers would add an economic burden.
Source: NY Times, AFR