EUROPEAN UNION Committee of the Regions Migration: Global challenges, European responses Institute Leibniz Institute for Economic Research at the University of Munich 7 th Brussels International Economic Forum 15 October 2013 Proceedings
Introduction On 15 October 2013, the Munich-based Ifo Institute and the EU Committee of the Regions held the annual Brussels International Economic Forum (BrIEF), which focused on issues related to migration and the development of the welfare state in EU and international policies. Addressed by experts from academia, EU institutions and social partner organisations, the forum was attended by more than 150 experts from EU institutions and academia. Contents: Introduction... p. 2 Opening session... p. 3 Panel 1 Migration in Europe recent developments... p. 4 Panel 2 International migration and the welfare state... p. 6 http://cor.europa.eu
Migration: Global challenges, European responses Opening session The conference was opened by Gerhard Stahl, Secretary- General of the Committee of the Regions, who underlined several aspects of increased immigration and the different immigration policies adopted by EU Member States. He mentioned that countries like Germany and the UK were trying to attract highly skilled workers, while countries worst hit by the crisis were focused on restricting immigration. In addition, he underlined the economic, social and territorial impact of migration, not only at a European but also at an international level. He said that migration could have both positive and alarming consequences. Although migration could bring huge potential gains, the immigration of both poorly skilled and highly skilled workers poses a challenge to the European social model. In his conclusion, he referred to migration flows placing political strains on free movement within the European Union, and called for increased coordination and solidarity within and between the Member States. Professor Hans-Werner Sinn, President of the Ifo Institute, said that migration had become a pressing issue in recent years. Firstly, he began by describing the EU as a healthy island that people would like to come to and linked this to migration. Pointing to the free movement of people as a fundamental pillar of the EU, he said that migration policy should be tweaked to some extent and stressed that migration was necessary for peace and freedom in Europe. In her keynote speech, Mercedes Bresso, First Vice-President of the Committee of the Regions, spoke about migration flows and said that the time had come for the European Union to defend its values within its own borders, and that this goal was yet to be achieved. She said that the EU lacked a consistent and effective immigration policy and stressed that the latter should be carefully planned and should focus on the consequences for economic development. Migration was important not only because it raised social security issues, but also because it could bring benefits. In the face of demographic challenges, she argued that the EU needed to welcome immigration and ensure the best possible integration of immigrants into the labour market. Unfortunately, the public debate focuses on immigrants impact on the social system, failing to take into account their contribution in the form of tax and social security payments. Moreover, immigrants contribute to the economic growth of their host country. Mercedes Bresso then turned to asylum and visa issues and highlighted the need for renewed efforts to combat human trafficking. In relation to integration, she stressed the profound importance of local authorities and said that regional authorities were leading the management of integration policy. Finally, she concluded that migration was a fundamental human right and that EU public opinion should view immigration in a more positive way. Dagmar Mühlenfeld, Mayor of the City of Mülheim an der Ruhr, Germany, and representative of the German Association of Cities, gave the second keynote speech on European migration with a focus on Germany. She drew attention to existing European migration policies and underlined the need for a common effort to implement them. She stressed that a growing number of well-educated workers were deciding to immigrate to Germany and noted that 70% of immigrants originated from the EU s eastern Member States, especially Poland, Romania and Bulgaria. The mayor highlighted the benefits of immigration in demographic terms and added that integration was a pressing issue. She felt that labour market integration was crucial, not least for social integration. In her conclusions, she called on the European Union and stakeholders to assess the issue of free movement within the Union and suggested using EU funds to improve living conditions in immigrants countries of origin. Gerhard Stahl Hans-Werner Sinn Mercedes Bresso Dagmar Mühlenfeld 3
Panel 1 Migration in Europe recent developments In his introductory presentation, Professor Hans-Werner Sinn pointed to the enormous migration flows in Europe and the principle of free movement between the European Union s Member States. Statistics confirm that an immigration boom has recently taken place in Germany and Italy. Professor Sinn subsequently presented an overview of immigration from Eastern Europe to Western Europe. In 2011, 45% of Eastern European emigrants who migrated to Western Europe moved to Germany. Prof. Sinn welcomed the opening of the gates to the dependent workforce from Rumania and Bulgaria as of 1 January 2014, arguing that this was much better than the prior welfare migration of people who did not come to seek a job and which was allowed by the EU Directive on free movement of 2004. The latter type of migration, he argued, was driven not only by the attempt to work on a selfemployed basis, but also by the benefits of the welfare state, which, in terms of child benefits, were available immediately, and to their full extent after a waiting period of five years. From 2008 to 2012, the immigration flows from Romania and Bulgaria to Germany increased by 303%. Prof. Sinn argued that welfare migration was eroding the European social systems as it triggers a kind of deterrence competition among welfare states that will turn into a race to the bottom, or may at least give rise to new immigration constraints. He argued that it would be better to switch to the home country principle for EU citizens who are recipients of tax, rather than contribution financed welfare benefits. All EU countries should provide sufficient welfare benefits to the needy, but should leave it up to the latter where to consume these benefits. This is the only way in which the coexistence of free migration and the prevalence of the welfare state can be ensured, he maintained. Georg Fischer, Director of the European Commission s DG for Employment, Social Affairs and Inclusion, commented on the previous speeches and stressed the importance of a labour market view of migration and mobility. He felt that the main goal should be to preserve a high level of welfare, and promote an active population and productivity. Migration and EU mobility could be two positive signs. On the other hand, there were two problematic trends: distribution within the EU and investment in immigration. Mr Fischer concluded that the lack of recognition of formal and non-formal qualifications was the main obstacle to the better integration of migrants. Diane Schmitt, Head of Unit at the European Commission s Home Affairs DG, spoke about challenges and responses concerning immigrants from outside the EU. She first stressed the need to avoid public disputes over migration and called for solidarity and cooperation between Member States in order to help those in need of international protection. She argued that Europe should provide pathways to legal migration as a response to human trafficking. Ms Schmitt also highlighted the Hans-Werner Sinn Georg Fischer 4
Migration: Global challenges, European responses impact of, and future responses to, demographic challenges at an international level. She concluded by highlighting the EU s Stockholm programme, the challenge of integration and social inclusion and the urgent need for enhanced political coordination. Antje Gerstein, Permanent Delegate of the Confederation of German Employers Associations and Businesseurope, drew attention to business need for qualified workers, especially from outside the EU. Ms Gerstein viewed labour migration as a sensitive policy issue and stressed the need for flexible labour markets. She felt that the main objective should be immigration for work, rather than social immigration. Ms Gerstein concluded by noting that immigration often contributes to innovation. Luca Visentini, Secretary-General of the European Trade Union Confederation, said that while the discussion in previous years had been about border security, the present concern was integration. He noted that migration flows were affected by the crisis and that more attention should be paid to labour market integration of immigrants. Mr Visentini concluded by saying that he strongly believed that the trichotomy mentioned by Prof. Sinn could be sustained. Following the speeches and a general discussion with the audience, Gerhard Stahl concluded that the EU needed enhanced coordination between the Member States. In their final statements, panellists focused on the challenges of migration, inclusion and meeting the requirements of different labour market policies. Diane Schmitt Antje Gerstein Luca Visentini 5
Panel 2 International migration and the welfare state Panu Poutvaara, Director of the Ifo Center for International Institutional Comparisons and Migration Research, and Professor at the University of Munich, opened his presentation by discussing the reasons why Europe became a destination for migration flows in the second half of the 20th century. Countries like Germany had established programmes for temporary immigrants, who ultimately became permanent immigrants. He cited Adam Smith, who noted as far back as 1776 that migration was a response to economic incentives. He added, however, that there were many non-monetary barriers to migration. Prof. Poutvaara then commented on net migration around the world, stressing that migration promotes welfare and reduces efficiency, challenges redistribution, and reallocates income risks. He also drew attention to the huge potential gains from migration to a welfare state. He pointed out that several empirical studies have found no clear effect of immigrants on the wages of native workers. Also, there is no consensus on whether immigrants are net contributors to or beneficiaries of the welfare state. Finally, Prof. Poutvaara presented a sample of his team s work at the Ifo Institute and concluded that there was a correlation between education and potential migration. Herbert Brücker, Head of the Research Department at the Institute for Employment Research (IAB) of the German Federal Employment Agency (BA), opened his speech by saying that welfare benefits could affect migration. Firstly, he drew a distinction between dynamic benefits and static transfers: dynamic benefits were an incentive for a person to migrate and contribute to the economy of the host country, while static transfers had the opposite effect. Mr Brücker referred to unemployment as a basic problem, but noted that migration could have positive aspects. Countries with sound income redistribution and a satisfactory migration policy would be able to attract skilled migrants and could benefit from pension system gains and lower unemployment rates. Jean-Christophe Dumont, Head of the International Migration Division at the Organisation for Economic Cooperation and Development (OECD), presented recent work on international migration and the welfare state. He emphasised that the net contribution to the fiscal system of the host country was usually positive or neutral when taking into account public expenditure on education and health, for example. Nevertheless, immigration of high-skilled workers had a positive impact. He concluded that a collective effort was needed to counterbalance public misconceptions about migration. Anna-Elisabeth Thum, research fellow at the Centre for European Policy Studies (CEPS), Brussels, opened her remarks with three questions: what was an optimal migration policy? Panu Poutvaara Herbert Brücker 6
Migration: Global challenges, European responses How should the welfare state and labour market institutions respond to international migration? And do immigrants help to alleviate demographic challenges? Ms Thum said that migration could not alleviate demographic challenges without effective skill-matching mechanisms. Moreover, she drew attention to mechanisms that bring employers and employees together and referred to social networks and language barriers as important issues in migration. She concluded by saying that welfare and migration should be discussed as interrelated issues. Following the speeches, a debate took place between the panellists concerning the benefits and drawbacks of migration for a welfare state. Prof. Sinn referred to immigrants as collectors of resources. Mr Dumont, on the other hand, said that immigrants chose their target country based on the outlook and opportunities it offered, and not the potential benefits. To sum up, Prof. Poutvaara underlined the importance of differing perspectives on immigration and called on the Member States to enhance coordination of immigration policies. Jean-Christophe Dumont Anna-Elisabeth Thum 7
CDR_2046/12-2013/EN Migration: Global challenges, European responses 7 th Brussels International Economic Forum On 15 October 2013, the Munich-based Ifo Institute and the EU Committee of the Regions held the annual Brussels International Economic Forum (BrIEF), which focused on issues related to migration and the development of the welfare state in EU and international policies. Addressed by experts from academia, EU institutions and social partner organisations, the forum was attended by more than 150 experts from EU institutions and academia. Speeches, presentations and videos are available online at: http://cor.europa.eu/de/events/pages/7th-ifo-cor-brief.aspx November 2013 EUROPEAN UNION Committee of the Regions Edited by the Directorate for Communication, Press and Events of the Committee of the Regions Rue Belliard/Belliardstraat, 101 _ 1040 Bruxelles/Brussel _ BELGIQUE/BELGIË www.cor.europa.eu Institute Leibniz Institute for Economic Research at the University of Munich Press and Public Relations Poschingerstr. 5, D-81679 Munich Reproduction is authorised provided the source is acknowledged Photo credits: Committee of the Regions Conference proceedings 2012 20 p. 21x29,7 cm Printed at the Committee of the Regions in Brussels, Belgium