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IMF proposes prickly solutions for Europe's refugee 'challenges'

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IMF proposes prickly solutions for Europe's refugee 'challenges'



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Question of survival
How can Europe survive mounting refugee pressures?

A study by the IMF presented in Davos, Switzerland, has proposed that the countries of Europe suspend some of their existing rules and turn to creative new solutions. Others add: ‘before it’s too late’.

The International Monetary Fund recommendations include:
allowing asylum-seekers to take jobs while waiting for a country’s official approval to stay;
governments paying employers part of refugees’ wages to get them into work as soon as possible;
and even suspending certain rules on minimum salaries. And it has to happen fast.

The EU in jeopardy
Last week, EU Migration Commissioner Dimitris Avramopoulos warned: “The situation is getting worse.”
He said the refugee crisis is jeopardising “the very core of the European Union”.

The report under scrutiny at the World Economic Forum in Davos is entitled ‘The Refugee Surge in Europe: Economic Challenges’.

Slight short-term growth, future uncertain
Although Avramopoulos, when he spoke at the European Parliament, offered no grounds to be optimistic, the IMF document says that refugees should actually boost European economic growth over the short term. However, the IMF adds that the refugees’ longer-term impact will depend on efforts to integrate them: “Quick labour market integration can unlock the potential economic benefits of the refugee inflow.” The study says this would minimise the risk of social exclusion while maximising newcomers’ net contributions to public finances in the longer term.

Public perception on jobs highly sensitive
‘The Refugee Surge in Europe: Economic Challenges’ focuses solely on economic impact, but also acknowledges grave concerns over the immigration effect on job markets in a period of already elevated unemployment. Previous arrivals of many migrants, on the other hand, have not had a very substantial impact on opportunities for native workers. The difference today is that the newcomers are not all generally low-qualified, such as in past surges; many of the Syrian refugees are well-educated, with one-fifth reporting having tertiary educations.

The study says: “International experience with economic immigrants suggests [they] have lower employment rates and wages than natives, though these differences diminish over time.” The factors which tend to slow integration include a lack of language skills and transferable job qualifications. Another key suggestion is to allow the refugees to move to places where opportunities to work are highest.

Borders open or closed?
European political and social realities, however, are pushing against this, with conservative or nationalistic reactions insisting that borders be more tightly controlled. The risks posed by any substantial alteration of EU border policies have high level figures in Berlin and Brussels expressing their concern extremely seriously.

A few days ago, Donald Tusk, the European Council president, warned that the EU must secure its borders or see the Schengen zone collapse: “We have no more than two months to get things under control.”

Jean-Claude Juncker, the European Commission president, last week said asylum seekers should be allowed to work while their claims are processed for the good of social cohesion. At present, states can enforce a nine-month ban on work for refugees.

All sorts of unpleasant things
Juncker said: “If people are sitting at home for months and years, idle and not working, they are never going to be able to become a fully valued member of Europe society. That is important if we want to protect ourselves from all sorts of unpleasant things.”

Both German Chancellor Angela Merkel and Juncker have explicitly linked new national frontier controls across Europe’s passport-free Schengen zone to a collapse of the single market at the core of the EU bloc, and of the euro currency.

Such a collapse would create major economic disruptions, and perhaps the end of Europe as we know it.


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