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IMF sees silver lining in EU migrant crisis

The massive arrival of migrants in the European Union will burden member states’ budgets in the short term but ultimately fuel economic growth, the IMF’s chief economist said Tuesday.

The arrival of hundreds of thousands of migrants in the EU, many fleeing the civil war in Syria, has unleashed a crisis for the bloc, but in the long term it will help its economies by expanding the labor force, said Maurice Obstfeld, the International Monetary Fund’s new economic research director.

“Accommodating the inflows of refugees will definitely strain fiscal budgets in some countries,” he told a press conference in the Peruvian capital Lima, where the IMF and World Bank are holding their annual meetings this week.

According to the United Nations, some 700,000 migrants and refugees will make the dangerous trip across the Mediterranean to Europe this year, with a similar number expected again next year.

The influx has caused conflict among the EU’s 28 members and led to a partial breakdown in their open-border system as member states struggle to cope.

“In all countries it’s going to be a challenge integrating new arrivals into the labor force,” said Obstfeld.

But welcoming migrants will ultimately benefit the EU’s economies, he added.

“That will take time, but eventually it will be positive for growth in Europe,” he said.

He emphasized that the Middle East has borne the brunt of the migrant crisis — more than four million Syrians have taken refuge in neighboring countries.

“There’s been a lot of focus of the European aspect of the problem, but there are countries in the Middle East that are facing pressure and which the Fund has been trying to help by easing fiscal targets,” he said.

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Posted By Bobricky On 09:56 Tue, 06 Oct 2015

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