The EU facing the challenge of the influx of Ukrainian refugees

On April 24, 2022, the United Nations High Commissioner for Refugees (UNHCR) listed more than 5,23 million Ukrainians who had been forced to flee their country after the Russian invasion. This number could reach 10 million if the war continues.

The European Union granted a temporary protection refugees from Ukraine, and European citizens have shown great solidarity with them. This large influx of refugees, however, raises some concerns. Our recent article (also available in French) explains why these concerns must be put into perspective and analyzes the different possibilities for distributing these millions of refugees between EU countries.

A medium-term opportunity...

The experience offered by the study of previous massive flows of refugees suggests that the exile of people from Ukraine should have, in the medium term, only minor effects on the economies of the countries of destination.

Indeed, like economic migrants, refugees occupy jobs characterized by a shortage of labour; their presence promotes the creation of new jobs; they consume and sometimes invest in the host countries. A contemporary example is the study of the massive influx of Syrian refugees in Germany in 2015 and 2016 which demonstrates their positive contribution to the economy of the host country, even if their arrival initially may have increased competition on the labor market for the less qualified local population.

The refugees do not constitute a cost in terms of public finances. On the contrary, it has for example been estimated that the drastic reduction in refugee admissions under the presidency of Donald Trump has cost the public finances of the United States more than 2 billion dollars a year. In addition, refugees create or strengthen ties between their host country and their country of origin, fostering ultimately Development economic activities, trade and innovation. This was verified with the "boat people" from Vietnam in 1970, who energized the trade between the United States and their country of origin following the lifting of the American embargo in 1994. More recently, the arrivals of refugees in the United States have also contributed to the rise of Foreign investments to their countries of origin.

However, these effects do not materialize immediately in the host economy.

Refugees have frequently experienced trauma. They are often less prepared for their new life than economic migrants. This results in difficulties in mastering the language of the country of destination or in a lack of specific skills to quickly integrate its labor market. Barriers faced by refugees may also compel them to accept jobs for which they are overqualified. It is not uncommon to see, in studies comparing employment before and after migration, a refugee who was an engineer, doctor or teacher in his country of origin occupy a much less qualified job in the country of destination. This phenomenon can therefore affect specific groups already present in the host countries, such as low-skilled workers and previously arrived migrants. Inequalities are then likely to increase in the countries of destination.

Finally, in some countries, a (too) high concentration of refugees at the local level can slow down the integration of new arrivals: thus, the concentration of refugees in Greece led to tensions despite strong solidarity from the local population, which may have contributed to the rise in power of the extreme right in this country. Such phenomena have also been observed in Germany. as Austria or the family Denmark after the arrival of Syrian refugees in 2015.

… thanks to shared responsibility between European countries

Without coordination between European countries, Ukrainian refugees risk congregating in geographically close countries, where there are often networks that facilitate their arrival and integration.

According to the location of the Ukrainian diaspora in 2020, the most attractive countries are Germany, Poland, Italy and Czechia. If Ukrainian refugees chose their destination according to this criterion, 60% of them would settle in these four states.

The four diagrams below (for the four countries studied, Germany, Poland, Italy and France) show the geographical distribution of Ukrainian protection applicants according to three scenarios: in the event that 4 million, 7 million or 10 million refugees were arriving in the 27 member countries of the EU.

Five distribution keys (ie five criteria on which to base the distribution policy) have been studied, whether these are spontaneously followed by refugees or used by States. These five distribution keys are based on the number of Ukrainians present in the country in 2020, the flows over the last five years, the share of the population, the GDP, and a combination of the share of the population and the GDP.

Projected distribution of refugees from Ukraine according to five distribution keys.
Provided by the author 

For more details on these calculations, see here.

In the scenario where there are 7 million refugees, our estimates based on the number of Ukrainians residing in each country (stock) indicate that 1,4 million of them would go to Germany, 1,3 million to Poland and approximately 90 in France.

A European-wide distribution based on the population of each country (pop) would somewhat reduce the pressure on Ukraine's neighboring countries, by allocating, again assuming a total of 7 million refugees, 600 refugees to Poland, 000 million to France and 1 million to Germany.

Another distribution formula taking into account GDP and population (mixed), would slightly increase the number for Western European countries and reduce it for Eastern European countries.

An opportunity for more coordination in Europe?

Europe's response to the influx of refugees from Ukraine contrasts with that adopted in 2015, when more than a million refugees, mainly from Syria, arrived in the Old Continent.

This time, the EU has decided, for the first time since its creation, to trigger the temporary protection for refugees. The granting of such status and temporary work permits, as well as access to health services, will undoubtedly facilitate the acquisition by refugees from Ukraine of the skills necessary for their integration.

In the long term, the economic consequences of refugee flows from Ukraine are likely to be minor, especially if the EU ensures shared responsibility among member states.

But the integration process will take time – despite the essential role played by Ukrainian networks in the host countries. To manage this situation, it seems crucial to distribute the refugees well between and within European countries, in order to avoid (too) high concentrations of these individuals.

Other refugee flows should not be forgotten, as conflicts and political tensions remain in other parts of the world, and are likely to trigger future forced displacements. Finally, the current Ukrainian exodus can offer a opportunity to reform asylum policy and to strengthen coordination within the EU.

Jean Francois Maystadt, Professor of Economics at the University of Louvaiin and Lancaster University, Catholic University of Louvain (UCLouvain)

This article is republished from The Conversation under Creative Commons license. Read theoriginal article.

Image credit: / Pazargic Liviu

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