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Migrant Influx Costs Europe, But Economy Could Benefit

  • Henry Ridgwell

The influx of hundreds of thousands of refugees and migrants is testing Europe’s ability to respond — especially in the poorer Balkan states. But some analysts argue that Europe will benefit by welcoming the huge numbers of young people — many of them well educated and willing to work.

Hundreds of thousands of migrants have arrived in Europe in just a few months. They range from the elderly to newborn babies. Many are ill or injured.

Their immediate needs are clear: shelter, food, medical care.

Croatia appeals for help

Croatia has accepted tens of thousands of migrants in just two weeks. Its president, Kolinda Grabar-Kitarovic, appealed for global help at the United Nations General Assembly.

FILE - A man shouts while people wait to clear a police line as they entered into Croatia from Serbia, in Babska, Croatia, Sept. 25, 2015.

FILE - A man shouts while people wait to clear a police line as they entered into Croatia from Serbia, in Babska, Croatia, Sept. 25, 2015.

“Since mid-September with almost 80,000 people entering Croatia, my country has joined the line of EU and neighboring Southeast European countries that has been heavily burdened with this crisis," said Grabar-Kitarovic.

The European Union has pledged financial assistance to non-EU Balkan states. For geopolitical reasons, it must do more to help Serbia, argues James Ker-Lindsay of the London School of Economics.

“What happens if it’s left with this problem? And in fact we’ve already started to see some Eurosceptic voices taking that line.," he said. "In fact, notably the Russian ambassador in Belgrade even has started the line of ‘Look, the EU is going to sell you out, look what’s going to happen, you’re going to be left carrying the can for this refugee crisis.'”

Costs, benefits

Germany expects up to 1 million asylum seekers this year alone. The upfront costs of housing, education and social care are considerable — but it could stimulate the economy, argues Christian Odendahl of the Center for European Reform.

FILE - Migrants queue at the compound outside the Berlin Office of Health and Social Affairs (LaGeSo) as they wait for their registration in Berlin, Germany, Sept. 21, 2015.

FILE - Migrants queue at the compound outside the Berlin Office of Health and Social Affairs (LaGeSo) as they wait for their registration in Berlin, Germany, Sept. 21, 2015.

“The refugee crisis in the short term will probably be beneficial for Europe, because Europeans have to loosen their fiscal orthodoxy a little, which probably helps the economy in the short term,” he said.

Odendahl says many European countries — including Germany, Italy and France — face ageing, declining populations.

“In the long term, the refugee crisis of course poses a challenge, but also it has the potential to help Europe — or parts of Europe — solve their demographic problems. It depends on the extent to which Europeans will be able to integrate migrants, particularly into the labor markets.”

Analysts say integration of the migrants remains a huge challenge — but also an opportunity to rejuvenate Europe’s economies.

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