ECONOMIC ASPECTS OF IRREGULAR IMMIGRATION INTO THE EUROPEAN UNION

ECONOMIC ASPECTS OF IRREGULAR IMMIGRATION INTO THE EUROPEAN UNION Lino Briguglio University of Malta Presentation at the Philippine Institute of Development Studies, Manila, Philippines 11th April 2016

CONTENTS 1. Unprecedented influx of migrants 2. The migration routes 3. International law re refugees 4. Class of cultures 5. Economic considerations 6. The European response 7. Conclusion

1. Unprecedented influx of migrants

1. Unprecedented influx of migrants More that a million migrants In recent years, Europe has experienced a huge influx of irregular or unlawful immigrants, mostly from the Middle East and Africa, unprecedented in modern history. More than a million migrants crossed into Europe in 2015, entering mostly through six European Union nations - Greece, Bulgaria, Italy, Spain, Malta and Cyprus. The vast majority arrived by sea but about a third made their way over land via Turkey. There are push and pull factors causing such a large migration inflow into the EU, with the push being civil war and terror in the country of origin of the migrants and the pull factor being the a better quality of life in Europe.

1. Unprecedented influx of migrants Irregular entries between 2013 and 2015 Source: European Commission (Jan 2016): managing the Refugee Crisis: State of Play and Future Actions. Retrieved from: file:///c:/documents%20and%20settings/user/desktop/eam_state_of_play_and_future_actio ns_20160113_en.pdf

1. Unprecedented influx of migrants A typical scene in 2015 Migrants queueing for buses, at a temporary holding center near the border line between Serbia and Hungary Sept. 2015. (AP Photo/Matthias Schrader)

1. Unprecedented influx of migrants The tsunami of refugees

1. Unprecedented influx of migrants Three dimensions of the crisis This crisis has three dimensions associated with: (a) the border control problem migration crisis, and steps have been taken to strengthen border control (b) the asylum problem including granting protection to migrants from war-torn (such as those from Syria, Iraq, Afghanistan, and other unstable states); and (c) a humanitarian crisis, with thousands of migrants risking their life to enter the EU country often with the intention of reaching Germany, Sweden or the UK)

2. The migration routes

2. The migration routes Routes used by migrants One of the frequently used routes in 2015 was via the Greek islands of Kos, Chios, Lesvos and Samos a relatively short connection via Turkey. The trips are often undertaken on rubber dinghies or small wooden boats. Another major route is via Libya to Italy (through the island of Lampedusa) or to Malta. This is a longer and more dangerous route. Here the problem is compounded by ill-treatment and exploitation by human traffickers. Both routes are hazardous and thousands of people have drowned trying to reach Greece, Italy or Malta.

2. The migration routes Routes used by migrants

2. The migration routes Migration hotspots Reproduced from European Commission (Jan 2016): managing the Refugee Crisis: State of Play and Future Actions. Retrieved from: http://ec.europa.eu/dgs/home-affairs/what-wedo/policies/european-agenda-migration/backgroundinformation/docs/eam_state_of_play_and_future_actions_20160113_en.pdf

2. The migration routes Greece has become a major point of entry Many Syrian, Afghan and Iraqi migrants who enter the EU through Greece attempt to reach Germany and other northern European countries via the Western Balkans (mainly Serbia and Macedonia) and than via Hungary. The Greek islands of Lesbos, Chios and Samos and the Italian island of Lampedusa have been highly impacted by these flows as they are the first point of entry into the EU via Libya and Turkey.

2. The migration routes Tragedies in the Mediterranean About 4000 migrants are thought to have died in 2015. Some tragedies that occurred in 2015 are: Two boats carrying about 500 migrants sank after leaving Libya on 27 August; The bodies of 71 people, believed to be Syrian migrants, were discovered in an abandoned lorry in Austria on 27 August; A shipwreck off Italy's Lampedusa island killed about 800 people on 19 April; At least 300 migrants are feared to have drowned after attempting to cross the Mediterranean in rough seas in early February

2. The migration routes Dangerous crossings September 2015. An image of a drowned toddler washed up on the beach in one of Turkey's prime tourist resorts after at least 12 presumed Syrian refugees died trying to reach the Greek island of Kos.

2. The migration routes Heroic rescues Italian navy rescues asylum seekers traveling by boat off the coast of Africa on the Mediterranean, Red Cross officer carries a baby wrapped in a blanket after migrants disembarked at the Sicilian Porto Empedocle harbour, Italy, Greek islanders who have been on the frontline of the refugee crisis were nominated for the Nobel peace prize.

2. The migration routes Threats to law and order German policemen watch over migrants who had arrived at the border on foot from Salzburg train station in Austria Migrants trying to reach England are stopped by French police.

3. International law re refugees

3. International law What is a refugee? An asylum seeker is someone who is seeking international protection but whose claim for refugee status has not yet been determined. On the other hand a refugee is someone who has been recognized as such under the 1951 Geneva Convention. The Convention defines a refugee as any person who: owing to well founded fear of being persecuted for reasons of race, religion, nationality, membership of a particular social group or political opinion, is outside the country of his nationality and is unable or, owing to such fear, is unwilling to avail himself of the protection of that country; or who, not having a nationality and being outside the country of his former habitual residence as a result of such events, is unable or, owing to such fear, is unwilling, to return to it

3. International law Asylum seekers, refugees and illegal emigrants An illegal immigrant generally refers to a person who enters a country without a valid passport or visa. But the 1951 Refugee Convention prohibits states from imposing penalties on those entering illegally who come directly from a territory where their life or freedom is threatened. Thus the term illegal may not be appropriate for persons who could be eventually be considered as refugees. Sometimes the word irregular is used instead. The term illegal however would be appropriate for those who enter a country without a valid passport or visa and who are not seeking protection, or to those who enter with the proper documentation but overstay.

3. International law The Dublin Regulation Under an EU rule known as the Dublin regulation, refugees are required to claim asylum in the member state in which they first arrive. But some EU countries, such as Greece, Italy, and Croatia, have been allowing migrants and refugees to pass through to countries where they have families and better prospects. Germany received by far the most asylum applications in the EU about 800,000 in 2015 France and the UK also record high number of asylum seekers.

3. International law The Dublin Regulation under threat One of the principal aims of the so-called Dublin Regulation is to prevent an applicant from submitting applications in multiple Member States. Another aim is to reduce the number of "orbiting" asylum seekers from member state to another member state. The country that the asylum seeker first applies for asylum is responsible for either accepting or rejecting asylum, and the seeker may not restart the process in another jurisdiction. Currently the Dublin regulation is under threat. In 2015 Hungary, due to the high rates of asylum applications stopped on receiving back its applicants who later crossed the borders to other EU countries in June 2015 and in August Germany decided to process the asylum applications of Syrians directly itself.

3. International law Procedure to claim refugee status Another consideration in this regard is that in order to become an asylum applicant and eventually be recognised as a refugee, a migrant generally speaking need to claim asylum within a reasonable period of time on 'first safe country' they arrive after fleeing their country of origin. If a claim is accepted, and the applicant receives a refugee status for a given period of time (e.g. five years. However conditions such as the right to work, and welfare benefits entitlements and the right to bring their family to the country vary between countries. If the original claim is refused, the applicant has a right to appeal, in some countries more than once.

3. International law Refusal of refugee status Another problem relates as to what happens if the Asylum seeker is refused his application for refugee status and also loses an appeal. In principle, the applicant should return to his country and if he/she refuses to do so, the government should impose deportation. This leads to a backlog of applications and appeals and legal wrangling by those who do everything not to go back to their country. Yet another problem is that many governments in Europe try to passing the responsibility for asylum seekers off to neighbouring countries.

3. International law Common European Asylum System As stated, different EU Member States treat their asylum seekers differently. In terms of the conditions they impose on such migrants. The EU is trying to harmonise the treatment of asylum seekers and refugees through what is known as the Common European Asylum System which contains legal instruments covering issues such as which Member State is responsible for hearing an asylum claim, the procedures to be used in reviewing the asylum claim and the living conditions pending a decision. However, as we shall show later, the EU policy is in disarray at the moment.

4. Clash of cultures

4. Clash of cultures The Muslim problem The migration crisis has created major social and political problems in the EU. This problem is associated with the presumed inability or unwillingness of Muslims to integrate in the European culture, particularly attitudes towards gender and upholding of practices considered to be barbaric in the EU. Islamophobia (fear of Muslims) has been further stoked by political parties taking advantage of this situation. The terrorist attacks by radical Muslims has not helped to abate this fear.

4. Clash of cultures The moderate Muslims tainted by radical one In some European countries, notably France, England and Germany many Muslims migrated to find a job, but as families joined those already living in Europe, the Muslim population increased rapidly and continues to grow due to a high birth rate among Muslims. Some parts of English cities and some suburbs of Paris (banlieues) have practically been transformed in Muslim enclaves. Most French and British Muslims uphold a moderate form of Islam are often lumped with the radical ones, who are not willing to belong to the country which hosts them.

4. Clash of cultures Global terrorism effect European attitudes These fears were further exacerbated by the growth of Al Qaeda and ISIS, through which September 11 attacks, the Madrid train bombings, the London Underground bombings, the attack on Glasgow Airport, the recent Paris and Brussels massacres. The fear further grew when it was realised that the danger could also come from home-grown terrorists. A man holds his head in his hands as he lays flowers in front of the Carillon cafe, in Paris, Saturday, Nov.14, 2015.

4. Clash of cultures Exacerbating matters The huge inflow of migrants from predominantly Muslim countries (Libya, Afghanistan, Syria, Iraq and others) is stirring up further anxiety among many Europeans. The problem is exacerbated by the fact that Muslims are not a homogenous group, and it is difficult to identify an organisation or a leader that represents all Muslims. Another exacerbating problem is that when migrants are mostly young single men, there has been instances where women were abused, especially if those men are jobless, as happened in the case of the sexual assaults in Cologne and other cities, Germany on new Year s eve.

4. Clash of cultures Strong negative reaction against migration This huge migration flow is also major area of concern for the EU, mostly because it has created a strong negative reaction against illegal migrants across Europe. In turn this has given rise to an increase in support for right wing Xenophobic parties in various EU countries including Sweden, the Netherlands, France, the UK, Spain and even in Germany.. Supporters of these parties claim that most migrants in Europe are not entitled for refugee status and that they are really economic migrants, seeking a better life. They further argue that the main problem is weak border management and weakness in repatriating these immigrants.

4. Clash of cultures Right wing parties with seats in parliament.

4. Clash of cultures Anti-migrant attitudes Anti-migrant attitudes are strongly felt in the Visegrad group of countries (the Czech Republic, Hungary, Poland and Slovakia) and also in Austria, this time from the governments of these countries themselves and not from relatively small parties. The governments of these countries have out-rightly stated that they will not abide by any imposed burden sharing or refugees. They also appealed to Western European countries that are target destinations for migrants to review their asylum policies, because soft policies are attracting further waves of migration.

5. Economic considerations

5. Economic Considerations Costs and benefits There are a number of costs benefits associated with the inflow of refugees. Briefly they can contribute to sustainable pensions. But the will compete for work and drag down wages and dent social welfare. According to the economist, evidence suggests that immigration has only a small impact on employment or wages. Unskilled workers and existing migrants are most vulnerable, as they are the closest substitutes for the new arrivals, and that an academic paper showed that a ten-percentage-point rise in the share of migrants working in menial jobs, such as cleaning, depressed wages for such positions by just 2%.

5. Economic Considerations The fiscal contribution The possible impact on government finances could be positive or negative, as this could lead to higher tax revenue and higher welfare benefits. Some studies found that there could actually be a net fiscal contribution when migrants join the labour force.* Most new arrivals into the EU are young, with a long working life ahead of them and they could actually make a net contribution to government revenue. However the fact that many migrants find it difficult to land a job and are generally poorer than the residents, redistribution of income to emigrants is to be expected. * See Ruist, J. (206) Fiscal cost of refugees in Europe. Retreived from http://www.voxeu.org/article/fiscal-cost-refugees-europe.

5. Economic Considerations Estimates of migrants net contribution According to an IMF study* the influx of immigrants in the EU refugees will add around 0.19% of GDP to public expenditure in the European Union (0.35% in Germany) in 2016. This will add to public debt, and given higher joblessness among refugees, unemployment could rise. However in the longer run, as the new arrivals integrate into the workforce, they could boost annual output by 0.1% for the EU as a whole, and 0.3% in Germany. They should also help to reverse the upward creep of the cost of state pensions as a share of GDP, given their relative youth. * See Aiyar, S. et al. (2016) The Refugee Surge in Europe: Economic Challenges. Retrieved from: https://www.imf.org/external/pubs/ft/sdn/2016/sdn1602.pdf.

5. Economic Considerations The results depend on the assumptions However these figures are based on various assumptions and they highly on quickly their asylum applications are processed and how soon they find jobs. Also, given the unprecedented very high immigration inflows, the positive arguments relating to pension sustainability and enlargement of the labour force is losing support in Europe. Conversely, the negative argument relating to social welfare burden is gaining support. Over and above these considerations, there are concerns relating to security and cultural conflicts, which could also lead to financial burdens associated with the management of civil strife.

5. Economic Considerations The economic problem The economic considerations can be succinctly summarized as follows: In the short-term, there are likely to be net costs to the host country associated with welfare transfers, but these could be outweighed in the long-term as a result of employment opportunities for migrants, leading to an expansion of the labour force, and possibly resulting in counteracting sluggish economic growth and reducing the pension burden associated with an ageing population. The aging population problem is particularly severe in the EU. Vitor Constâncio, European Central Bank vicepresident, said recently: Europe has been doing a sort of collective demographic suicide. To change the demographic trends, promoting birth is not enough. It also has to be done through immigration.

6. The European response

6. The European Response No long-term strategy initially The response by the EU to the migration crisis was mostly reactive, and opened rifts between the European Commission and Member States, and between Member States themselves. Initially the focus was mostly based on search-and-rescue operations, and on impeding human trafficking, mostly by destroying the fishing boats used to ferry migrants to Italy. The need for a long-term strategy aimed at strengthening border control was not given enough importance. This could have been more effective when number of migrants was much smaller and therefore more manageable.

6. The European Response The Initial weak European response

6. The European Response Difficulties in deporting migrants In addition, the method adopted in the EU to return irregular migrants is often ineffective, and a large proportion of decisions to dipot migrants have not been enforced. Lack of valid travel documents is one of the main obstacles to successful return. At present, EU Member States may issue a substitute document for those illegally staying do not possess a valid travel document. however, its recognition by third countries is low.

6. The European Response The Dublin Regulation

6. The European Response A Crisis of solidarity In September 2015, EU leaders meeting in Brussels approved a plan to redistribute 120,000 refugees among member states. This was however the opposed by several countries, including Hungary, Romania, Slovakia and the Czech Republic, a rare occasion when a decision was taken with a majority vote rather than by unanimous consensus. Only about three hundred were actually relocated that the relocation plan has been considered a flop. This was probably because of various administrative, logistical and political obstacles. Other problems relate to the sensitivity of migration giving rise to anti-refugee sentiment and lack of consensus among member states.

6. The European Response The European response Also in September 2015, the European Commission presented a set of priority actions to implement the socalled European Agenda on Migration to be implemented during the first months of 2016. The agenda has a number of objectives including: (a) Reducing the incentives for irregular migration, by (amongst other things) controlling smugglers and forging partnerships with key countries; (b) Saving lives and securing external borders by amongst other things strengthening the border guard system (c) Putting in place a strong common asylum policy by amongst other things strengthening the Dublin system; (d) A new policy to keep Europe an attractive destination for legal migrants in a time of demographic decline.

6. The European Response Upgrading of Frontex Frontex (Frontières extérieures) is the European Agency for the Management of Operational Cooperation at the External Borders. Up to 2015, this agency had limited resources, and relied mostly on voluntary contributions by Member States and was unable to carry out its own return or border management operations without the prior request of a Member State. In December 2015 the European Commission upgraded Frontex with an agency that will work together with the national authorities responsible for border management, including coast guards. The beefed-up border control agency is intended to strentghen border control with the collaboration of the Schengen area members.

6. The European Response Schengen Area members are obliged to join Members of the Schengen Area and those obliged to eventually join (this includes EU member states excluding Ireland and the UK) are obliged to participate in the integrated management of the external borders of the European Union France and Germany were the main pushers of this system but with Poland and Hungary opposed it due to it mainly due to the fact that it infringes on sovereignty.

6. The European Response The Schengen Area

6. The European Response Monitoring the EU external borders The external borders will be constantly monitored with periodic risk analyses and mandatory vulnerability assessments to identify and address weak spots. To increase security within the Schengen area, the Commission is proposing a targeted modification of the Schengen Borders Code to introduce mandatory systematic checks of EU citizens at external land, sea, and air borders. Checks will now also be mandatory when exiting the European Union. These measures will also serve to verify that persons arriving into and exiting the EU do not represent a threat to public order and internal security.

6. The European Response The European response The right to intervene by the Agency is not supported by all EU member states, particularly those Members whose borders form the external EU borders such as Greece, Hungary, Italy, and Poland. They want to ensure that intervention is possible only with the consent of the Member States. As part of the Border and Coast Guard a Return Office is to be established with the capacity to repatriate immigrants residing illegally in the EU, even without the consent of the government in question. The proposed intervention of the Agency, including the ability to deploy specialists to member states borders, even without the approval of the national government, is proving to be a source of friction between the European Commission and some member states.

6. The European Response The EU Turkey agreement On 18 th March 2016 the EU and Turkey agreed on a scheme to relocate migrants from Greece to Turkey. The agreement includes a 3 billion package granted to Turkey, so that for every Syrian being returned to Turkey from the Greek islands, another Syrian will be resettled to the EU. Turkey would also be expected to prevent new routes for illegal migration opening up into the EU. The agreement also involved visa liberalisation for Turkish citizens, speeding up of negotiations for upgrading the Customs Union and leading to Turkey s EU accession.

6. The European Response Criticism of the EU Turkey agreement This arrangement has been criticised as this system would seem to go against the EU s charter of fundamental rights and EU values due to its implications of forced deportations. In addition there are doubts as to whether Turkey is a safe country for deporting refugees. In addition there is the possibility that refugees will look for other routes, including the Lampedusa and Malta route leading to Italy and an Albanian and Bulgaria route leading to Germany and Sweden. Will the European Commission undertake similar arrangements with Egypt and Libya if migrants start using these countries as a passage to the EU?

7. Conclusion

7. Conclusion Various meetings and proposals Over the year 2015, various meetings on the migration crisis were held and various proposals have been put forward to solve this problem. As has been shown the issue is multifaceted and associated with humanitarian, political cultural and economic issues. The humanitarian aspect of the problem would be reduced if the conflict in the Middle East and Afghanistan could be solved. This is not likely to happen any time soon, and the migration inflow is likely to increase. This therefore calls for the strengthening of the capacity of the EU to receive genuine asylum seekers, and expedite the processing procedure. This could also hasten the absorption of employees into the formal labour force.

7. Conclusion Integrating migrants into the labour market Integration of the refugees into the EU labour market would reduce the economic burden of hosting them in the EU, and could even contribute to economic growth and pension sustainability. Employment possibilities would also help to reduce social problems and could also possibly reduce the influence of extreme right wing parties. It also has cultural overtones as immigrants who work are likely to assimilate faster than those who are forced to sit around in run-down enclave areas of cities. In the long run most children of migrants will adopt core European values, but the short run matters too.

7. Conclusion Expediting the processing of asylum seekers Also, expediting the processing of asylum seekers and letting them work while their application is being processed could hasten the integration of migrants and reduce the possibility of them being stigmatized as social parasites. Integration into the labour force by immigrants could be hastened through targeted policies to reduce skill mismatches and other market frictions, including language barriers. Care however should be taken to control exploitation of immigrants by unscrupulous employers.

7. Conclusion Social assimilation A major problem associated with the migration issue is the fear of cultural clashes. The migration problem could therefore be mitigated if the migrants are assimilated into the host country society as fast as possible. But the process of assimilation is fraught with various problems. First of all there are ingrained religious and cultural differences between the host communities and certain migrants. In Europe the absorption of recent migrants has mostly occurred in Germany and Sweden. However even in these countries, anti immigrant sentiments have grown, particularly in Germany after the Cologne events on New Year s Eve.

7. Conclusion Economic and social assimilation is essential Some may consider it to be a cultural imposition by the EU countries to insist that migrants should respect the law and norms of the host countries, which in the case of Europe include a high degree sexual equality, and protection of human rights. But economic and social assimilation of migrants, through education and more importantly, through integration of migrants into the labour force, is essential if the migration problem is to be downscaled.

7. Conclusion Does the future beckon for irregular migrants?