EU sees three million migrants arriving by 2017

Refugees and migrants disembark a passenger ship in Greece on Nov 1 2015.
Refugees and migrants disembark a passenger ship in Greece on Nov 1 2015.REUTERS

BRUSSELS (AFP) - Three million migrants fleeing war and poverty are seen entering the EU by 2017 in a development likely to have a marginal positive impact on the economy, the European Commission said Thursday.

In its first ever assessment of the economic effect of Europe's biggest migration crisis since World War II, the Commission said the influx could boost gross domestic product by 0.2 to 0.3 per cent.

EU economic commissioner Pierre Moscovici said the "weak but positive" economic effect of the migrants could help offset growing hostility towards them.

"It means you can't say the influx of refugees is likely to have a negative impact or kicking people out of the labour market," Moscovici said, unveiling the Commission's autumn economic forecast.

"That will combat a certain number of received ideas and backs the politics of President (Jean-Claude) Juncker," who has pushed for the EU to do more to help them.

The Commission, the executive arm of the 28-nation European Union, said it expected one million migrant arrivals in 2015, soaring to 1.5 million in 2016 then decreasing to half a million in 2017.

 
 

That would represent an 0.4 per cent EU population increase once unsuccessful asylum applications were taken into account, it said.

The new arrivals would give a short-term boost to growth from higher government spending on new asylum seekers, the Commission said.

That would be followed by a medium-term boost because of an increase in the number of workers available "provided the right policies are in place to facilitate access to the labour market," it said.

Generally, the euro zone economy is to continue its moderate recovery over the next two years following the Greek bailout crisis, despite headwinds from the wider global economy, the Commission said.

Despite a slowdown in China and emerging markets hampering demand for exports, the 19-country single currency area is to grow by 1.6 per cent in 2015, 1.8 per cent in 2016 and 1.9 per cent in 2017, it said.

"Today's economic forecast shows the euro area economy continuing its moderate recovery," said a statement from Valdis Dombrovskis, the EC's Vice President in charge of the euro.

Low oil prices, a weaker euro exchange rate and the European Central Bank's huge economic stimulus policy of so-called quantitative easing had all helped boost the euro zone in recent months.

But Dombrovskis said it was important to keep up the pace of reforms across the eurozone.

"This is important, 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," he said.

Greece, which has seen more than 600,000 people landing on its shores this year, remains a worry with the economy seen slipping back into recession in 2015 following months of crisis over its bailout which resulted in capital controls that shut banks for weeks.

The Greek economy is predicted to remain in recession in 2016 but the new eurozone bailout programme is expected to bring a return to growth in 2017, it said.

Spain's deficit is meanwhile likely to be higher than forecast even recently, adding to concerns that led Brussels last month to order Madrid to present a new budget that will be closer to EU rules.

The EU limit for deficits is 3 per cent of gross domestic product but Spain's is forecast to be 3.6 per cent in 2016, higher than the 3.5 per cent predicted only three weeks ago, the forecast said.

France's troublesome deficit is meanwhile not expected to fall below three percent in 2017, adding to concerns over its repeated breaches of the EU's fiscal targets.

Germany, Europe's biggest economy and also the country hosting the largest number of asylum seekers, is to see its economy grow by 1.7 per cent in 2015 and 1.9 per cent in both 2016 and 2017.

The wider 28-nation EU's economy is set to grow by 2 per cent in 2016 to 2.1 per cent in 2017, the forecast said.