EU rises to the challenge of taking in millions of Ukraine war refugees

The EU moved swiftly in response to the millions of people fleeing the Ukraine war, invoking rules giving uprooted people the chance to stay, work and find schools for their children, in sharp contrast to the union’s far less welcoming approach to previous refugee crises.

Despite the strains those refugees are now putting on member states’ public services, many economists argue the fiscal burdens should be manageable — and that Ukrainians will be well-placed to find work in tight labour markets where their skills are in high demand.

The sheer scale and speed of the exodus since the invasion began on February 24 makes this a formidable challenge. “This is bigger than any other humanitarian crisis since the second world war,” said Jean-Christophe Dumont, head of migration at the OECD, noting that Poland had already received as many refugees as arrived in the EU between 2014 and 2017, while Hungary had taken in five times the number of migrants it usually received in a year.

But the bloc’s response offers hope that it has learnt the lessons of the 2015 Syrian refugee crisis and can avoid a public backlash by taking a more collaborative approach, with the initial surge of community aid bolstered by help from the private sector and more formal state support.

Ursula von der Leyen, the European Commission’s president, said the bloc would “mobilise billions of euros” to build reception centres, mobile hospitals and schools, and fund jobs and childcare.

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The biggest change from previous crises is the EU’s decision to activate the “temporary protection mechanism”, giving the millions who have fled Ukraine since the start of the conflict the right to live and work in any member state, with access to healthcare, housing and schooling.

More than 3.2mn people have left Ukraine since Russia’s invasion began — exceeding in weeks the numbers who arrived in Europe from Syria over a two-year period in 2015-16. The EU’s failure to share responsibility for refugees since that crisis has left thousands stuck behind barbed wire at borders, or crowded into camps in the countries least equipped to cope.

“It’s very different from the past,” said Hanne Beirens, director of Migration Policy Institute Europe, a Brussels-based think-tank, who argues that the protection mechanism will lessen the costs of hosting refugees, because they can move wherever they have family or community ties, or see the best prospects of finding work.

While Poland was already home to an estimated 1mn-2mn Ukrainians — most of whom arrived since Russia’s annexation of the Crimea and backing of separatists in eastern Ukraine in 2014 — there are also large communities in Italy, the Czech Republic, Germany and Spain.

Goldman Sachs estimated that if EU countries hosted 4mn Ukrainians over the coming year, and they chose to settle in a similar pattern to existing communities with financial support similar to that extended in previous refugee crises, the fiscal cost would be a “very manageable” 0.1-0.2 per cent of gross domestic product in the EU’s four biggest economies.

The OECD’s Dumont was more cautious, underlining the extreme uncertainty over how many people would leave Ukraine, which countries they might move to, how long they would stay and the varying levels of financial and practical support from governments.

Large numbers were likely to stay in Poland, given the size of the existing Ukrainian community, he said, adding: “Unless the situation changes very quickly we should be prepared to welcome these people for some time.”

In the short term, countries on the frontline are struggling to cope. Non-EU member Moldova appealed to the UN for help moving refugees to Romania and onwards, and Warsaw’s mayor asked for more systematic support from the west to prevent public services being overwhelmed.

With estimates of the likely exodus rising from the UN’s initial estimate of 4mn, the OECD underlined the need for a collective effort, urging the EU to share the financial burden with the most affected countries.

Beirens said that in contrast to 2015, when the European Commission struggled to earmark funding for a response to the Syrian crisis, it could now draw on a more readily available pot in its Asylum, Migration and Integration Fund.

Rafal Benecki, a Warsaw-based economist for ING, maintained that the costs of meeting refugees’ immediate needs were “manageable locally”, with Polish households and local authorities taking the lead and state funding to follow. He estimated that spending to support a refugee population of 2.5mn for six months to a year would total 20-40bn zlotys ($4.7bn-9.4bn), equivalent to 0.7-1.4 per cent of GDP.

European authorities have acted rapidly to address practical problems, offering access to public transport and communications networks, and seeking ways to help convert hryvnia savings into euros.

But it should also be a priority, Beirens said, to help refugees find work and become self-sufficient — by funding language training and childcare and recognising professional qualifications.

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Nicolas Schmit, the EU’s jobs commissioner, said last week that Brussels would work with public employment services to assess where there were gaps that refugees could help fill. “These people really want to work,” he said, “so we have to facilitate their integration”.

With labour shortages across the eurozone, and unemployment rates well below the EU average in Poland and Hungary, employers are likely to offer a readier welcome than refugees have received in the past.

Benecki at ING said the first wave of Ukrainian migration after 2014 had already added around a percentage point to Poland’s annual GDP. The new arrivals — if they chose to stay — would help address chronic shortages in both skilled sectors, such as teaching and IT services, and in lower skilled areas.

“We don’t know how long the conflict will last,” he said. “In the longer term, probably some people will stay. I hope they can also benefit and contribute to the economic boom of this country.”

Source: Financial Times