In the pipes of a vicious circle


The mass migration of thousands of people have led to a new developing step in national and supranational asylum legislative in the EU. These improving attempts have been followed by Euro-scepticism, internal political crises and nation polarizations, combined with the probably largest humanitarian catastrophic events occurred on the European soil.

The story of the vicious circle begun few years ago, when the culmination of Syrian crisis launched several waves of migrations in the Middle East area. Consequently, it  led to the probably biggest migration ever seen in the modern era. More than a million people have been displaced due to conflicts in their countries. Some of them have settled in the nearest states to the Middle East such as Turkey, but the majority have decided to continue further to the West, towards the EU countries.

There are two equally dangerous big routes for the migrants: the so-called “Balkan route” and “the Mediterranean” one. After having passed some several thousands of kilometres on their ambitious journey, migrants decide to permanently settle in the richest EU Member States. In accordance with the EU Commission’s report for 2014, five EU Member States (Germany, France, the Netherlands, Italy and Denmark) are accepting more than 70% of total of Middle East migrants.

In this context, the problem of accepting more immigrants is now threatening Europeans and it is creating a vicious circle. A zero-sum game, played out by some EU Member States about the quota system, did not contribute to the European “multicultural dream” which, by the way, failed, as stated by the German Chancellor Merkel. Such a big amount of idealism across the Old continent obviously did not survive.

However, the current situation speaks for itself: hundreds of thousands of immigrants are dispersed on European soil, searching for a better life.

The very majority of the immigrants, coming to Europe, seek for the asylum in Germany, a state with a strong social welfare system. Thus, it is not surprising that data released by the German Government showed that nearly 1.1 million people entered Germany last year in search of asylum.

An ethical dilemma

The question sine qua non, which fuels the debate in the European Union is: should the Union ban or accept immigrants? Several solutions have been offered by the EU authorities, but none of them show a clear vision on how to face this challenge both on short and long term. Should Europe do the quota system? Should Europeans do all their efforts to integrate immigrants within their communities? And, last but not least, the key question: can immigrants help in economic development of their host countries? When it comes to the immigrant issues, it seems that European politicians are conducting pure utilitarianism. From this point of view, one million of people arrived only in Germany could be possibly a good news. Which country would complain if its public spending increased by more than 1.5% in 2015?

German media broadcasted interviews with leading domestic economists, which claimed that refugees could boost German national economy and carry out a significant role within the EU economic development. Some other research centres have gone so far, predicting cost-benefit scenario in different outcomes of the immigrant crisis.

Source: DIW Berlin 2015

Source: DIW Berlin 2015

In accordance with the data shown on the chart, Germany is going to have quite tough forthcoming times. In case of the “worst scenario”, Germany will have a negative GDP trend this year, down to -1.5%, but if its Government decides to accept all the immigrants, its recession somehow will still keep with its negative ratio, but this time, with less loss (it will be -0.7%).

However, there is not any relevant information attached to this chart, which would potentially explain all variables taken into consideration when designing these predictions.

According to some reports, Germany is the country with the most accepted immigrants so far. The estimated amounts are counting more than 220 000 approved asylum requests! Still, Germany, as all other host countries in the EU, has managed to maintain its stable economic growth.

If the Union needs the labour force for some specific sectors, then why would it miss this great opportunity and provide the jobs for immigrants arriving continuously?

An economic background

The core of the immigration crisis debate lies predominantly on talks about the economy and economic development of the receiving countries. Apart from the nationalistic populism in several Member States, which opposes to the acceptance of immigrants, there is a need of a political decisive willingness of the EU leaders in order to stop the crisis and potentially fix its negative consequences. However, it is not a simple economy topic but a complex issue which could resolve the destiny of thousands lives. This brings us to that elusive, new national virtue Chancellor Angela Merkel coined in a key summer speech on the refugee crisis: “flexibility.” To what extent are Germany and the EU ready to go further and how much their decisions will affect the economy and financial markets? These will surely become the most debated questions within the European Union.

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