Refugees and the complicated European response
Silvia Merler (Bruegel) gives a sense of urgency through a detailed look at the numbers of the refugee crisis and the European response—sobering numbers (the Syrian conflict has left 13.5 million people in need of humanitarian assistance, 6.6 million internally displaced by violence and 4.6 million people to have fled the country, mostly to Egypt, Iraq, Jordan, Lebanon, Turkey and the rest of North Africa). The UNHCR predicts that up to 1 million refugees and migrants could attempt to use the Eastern Mediterranean and Western Balkan route to Europe in 2016.
On a common European solution
Merler (Bruegel) describes Europe’s response as slow and confused:
A relocation scheme to help Greece and Italy deal with the influx of refugees last year. The plan is to relocate 40,000 Syrian and Eritrean nationals, from Italy and Greece to other EU Member States, upped to 160,000 in September 2015. But implementation has been very slow (to date only a low 885 refugees have been relocated). EuroIntelligence also highlighted the absence of progress on the allocation of refugees across member states—stressing notable French reluctance.
The EU is preparing an aid package of 700 million euros over three years to help Greece and other EU member states which are struggling with the large-scale influx of refugees, FAZ reports. EuroIntelligence notes that it will in the form of project-finance, and will be disbursed over several years (see the Wall Street Journal).
Ad-hoc measures emerge, from an injunction to Greece to meet EU norms on refugee policy within a one month deadline, border guards or troops to Macedonia (a non-EU country) to seal the border with Greece (an EU country)—which could create a difficult situation in Greece. Given the strains from refugees on Greece, there are discussions that the Greek bailout review could be linked (EuroIntelligence, Bloomberg, and Macropolis).
Aart de Geus et al., in a Vision Europe open letter, call for common European solutions to the refugee crisis as only joint solutions can credibly address the issue, with five major dimensions: (i) control the EU’s external borders so that only refugees fleeing war and persecution, who have a legitimate right to seek asylum, can enter and potentially remain in the EU—essential to preserve open internal borders; (ii) develop a system which distributes a much larger number of refugees across the Union, with member States not willing to host refugees themselves able to choose to make a primarily financial contribution to the system, with a Migration Solidarity Fund; (iii) improve, standardize and speed up the processes to determine asylum applications; (iv) improve the living conditions of refugees staying in countries close to their countries of origin; (v) work vigorously towards ending the violent conflicts that are the principal causes of the crisis.
Berthold Kohler (commentary in FAZ) writes that Merkel’s pursuit of a common European solution requires the participation of the other Europeans and Turkey—difficult to achieve, given the rise in populism and extremism in Europe. Divisions within Germany are high, reflected in the condemnation of the government’s proposal to increase social spending on Germans as a strategy to stem right-wing resentment over the integration of refugees (Handelsblatt), while others (David Böcking in Spiegel) argues that it will benefit the economy more broadly.
A contested deal with Turkey
An agreement was concluded with Turkey on March 18 (see EuroIntelligence and DW for example). According to the plan, irregular migrants arriving in Greece would be returned to Turkey (the ‘one for one’ resettlement approach). In exchange, Ankara would receive an extra €3bn of funding, accelerated accession talks, and access to European visas—resulting in criticism from analysts. Wolfgang Munchau calls it a bad deal for Europe that will probably never be implemented in full. Thomas Klau condemns the abrogation of Europe's long historical tradition of granting shelter to refugees. Gemma Pinyol describes the agreement as inconsistent, because of the legal constraint on mass returns of immigrants.
Implementation challenges are high, especially in Greece (Macropolis). Sergio Carrera and Elspeth Guild, in a CEPS commentary, write that the EU-Turkey plan for handling refugees is fraught with legal and procedural challenges: (i) EU law prohibits the collective expulsion of foreigners; (ii) it breaches the internationally recognized duty of non-refoulement; and (iii) it raises the issue whether Turkey constitutes a ‘safe third country’ for refugees. Jacob Funk Kirkegaard (Peterson Institute) adds that the 1-1 swap model with Turkey is a nonscalable fantasy, as EU leaders acknowledged that it does “not establish any new commitments on Member States as far as relocation and resettlement is concerned” (hence will be out of the agreed 160,000 quota slated for relocation from inside the European Union).
The border issue
Borders are increasingly being closed, and exceptions to Schengen put in place. Most recently, the Macedonian, Serbian, Croatian, and Slovenian borders were closed to all migrants, blocking the most widely used path northwards from Greece to the rest of Europe. Ifo chief Hans-Werner Sinn said that Germany should follow Austria’s example and control its national borders if the EU’s external borders are not protected more effectively, FAZ reports.
A permanent reinstatement of internal border controls would have a dramatic effect on economic growth throughout Europe, causing a noticeable decline in prosperity, according to a study by Bertelsmann Stiftung. For Germany alone, lower growth might be expected to produce cumulated losses between 77 and 235 billion euros between 2016 and 2025, reaching between 470 billion and 1.4 trillion for the EU as a whole. But some evidence suggests that these costs depend on how border controls are done, according to Hans-Werner Sinn (hat-tip EuroIntelligence).
Nuria Boot and Reinhilde Veugelers (Bruegel) provides research that show substantial long-term impact of migration on innovation and productivity growth in host countries—provided policies are in place to match migrants’ skill sets with host environments.
Meanwhile, the future of the EU is the broader picture…
What are the minimally sufficient conditions for the sustainability of the eurozone? EuroIntelligence peaks into the debate on—from political integration to highly imperfect integration with certain condition (Charles Wzplosz and Barry Eichengreen): a decentralized fiscal policy, a centralized monetary policy, centralized financial supervision, and a sovereign debt resolution mechanism - where costs are allocated at national level. Enrico Marelli and Marcello Signorelli argue on the contrary that fiscal integration is necessary, as a buffer against asymmetric shocks and as a means to raise investment spending to create real convergence.
This leads to questions about the future of the EU itself (also looked at by EuroIntelligence). Wolfgang Munchau notes that the EU is confronting four possible fractures: (i) a break-up of Schengen due to the refugee crisis; (ii) a fracture of the eurozone; (iii) an east-west fracture, exposed to Russia; and finally, (iv) Brexit. Mervyn King views a break up of the eurozone from a German rebellion against the losses imposed on them (and currently postponed). Elias Papaioannou (VoxEU) writes that the main constraints to European reforms and the future of the Eurozone is a growing institutional gap across member countries – especially between the core and periphery. He calls for coordinated action to close this institutional gap.
The College of Commissioners (press release) discussed the EC’s reports on countries’ progress in addressing the 2015 Country-Specific Recommendations and tackling macroeconomic imbalances.
