Among people: how much will the migration crisis cost the EU?

And how does the EU support refugees from Ukraine?

In March, Poland received 2.3 million migrants from Ukraine, who were looking for temporary shelter. According to the Deputy Prime Minister Piotr Gliński, Poland surpassed all the European countries. In addition, Ukrainians are welcomed in many other European countries. Kateryna Markevych, the leading expert on economic and social programs at the Razumkov Center, told Mind how this wave of migration will affect the situation in Europe.

russia's military aggression against Ukraine, which was launched on February 24, has caused the greatest humanitarian crisis since World War II. Since the beginning of the war, according to the UN data, almost 11 million people have been displaced, more than 4.1 million of whom have left Ukraine, while others have been internally displaced. Unfortunately, the war continues, and if the situation worsens, the number of refugees will increase dramatically.

How is Europe helping Ukrainian refugees?

Since the first days of the war, Europe has been working to accept millions of Ukrainians who had to flee. The EU hasn't yet recovered from the aftermathes of the COVID-19 pandemic, and governments, businesses and concerned Europeans are mobilizing billions of euros to build social care centers, childcare facilities, hospitals, schools and higher education institutions. European countries are more united than ever.

On March 4, the EU first implemented the Temporary Protection Directive (Directive 2001/55/EC of 20 July 2001), which gives Ukrainians the right to live, work, access education, health and social care in 26 of the 27 EU member states. Denmark, where the Directive doesn't apply, passed a special law on March 16. Funds have already been allocated for the relevant measures from the EU budget, which provides for €3.091 billion to address migration issues in the year 2022.

Paradoxically, the free movement of people within the EU, which is considered the greatest social achievement of European integration, was a factor in growing controversy just a few years ago.

The migration crisis caused by the Arab Spring was one of the factors for spreading Eurosceptic sentiments in the EU and one of the causes of Brexit. In the hope of finding a better life, there has been an influx of illegal migrants from North Africa and the Near East, which reached the number of 9 million migrants in the years 2008-2020.

How has European refugee policy changed?

Today's tragedy in Ukraine has united Europe. Back in 2015, Poland refused to participate in the EU's plan regarding the “relocation” of Syrian refugees on the continent, but today without any hesitation it “opened its door” to Ukrainians. According to the Office of the United Nations High Commissioner for Refugees (as of April 2, 2022), almost 60% of migrants, approximately 2.43 million people, are currently staying in Poland.

This can be explained not only by cultural and ethnic kinship, affordability, but also the presence of family ties, which arose due to long-term reorientation of labor migrants from Ukraine from Eastern direction to Western one (due to the military aggression in Ukraine in 2014 and visa-free regime with the EU) . Other Central European countries have also become an alternative for most Ukrainians: Romania welcomed 635,800 people, Moldova – 393,000 people, Hungary – almost 385,800 people, and Slovakia – 298,200 people.

The consequences of the migration crisis for Europe are still uncertain, but there are already fears that the wave of solidarity may end. A significant increase in the number of migrants, especially in countries bordering Ukraine, imposes a financial burden on their budgets, as well as on the “budgets” of taxpayers.

How much does the support of Ukrainians cost the EU?

The international financial group ING estimated that Poland's spending on supporting 2.5 million migrants over 6–12 months will amount to $4.7–9.4 billion, equivalent to 0.7–1.4% of GDP. If the war prolongs, countries must be ready for unstable migrant flows, which will require changes in economic policy.

At the same time, Goldman Sachs analysts are more optimistic: according to their estimations, sheltering 4 million Ukrainians in 2022 with financial support similar to that provided during previous migration crises will cost only 0.1–0.2% of GDP of the four largest EU economies.

In a long-term perspective, the costs of “integration” of millions of Ukrainians will be higher. The need for more fuel, food, medicine, etc. will enhance supply shortages and increase inflation level. Thus, in the eurozone it increased to a record high – 7.5% in March, compared to 5.9% in February (while the ECB set a target of 2%). Thus, the “social experiment” of several European countries must become an international responsibility.

What are the benefits of Ukrainian refugees to EU countries?

As Ukrainians have long been a major source of economic migrants in the EU due to their skills and competencies, refugees can integrate relatively quickly into the European economy, developing productive capacity, expanding the business environment (small and micro businesses) and paying taxes. For example, according to the European Commission data, in January this year, a quarter of companies in Germany and Poland reported about labor shortages. Ukrainian migrants may closethis “gap”, although such predictions are still somewhat overestimated, as the work is being looked for by single mothers traumatized with fleeing because of the war in Ukraine.

Newly arrived migrants can help overcome the shortage of staff in the science and education sector, be involved in hotel and restaurant business or care for the elderly people (part-time job). And as some migrants come from rural areas, their employment in rural areas can reduce the gap between rural and urban unemployment levels in European countries.

For Ukraine, emigration in such volumes is a significant challenge, as after the victory the country will need a full-scale realization of human capital in all spheres of life without exception. Currently, the state supports refugees and invites people to leave the country so as not to endanger them. However, the patriotism of Ukrainians works in our favor, the vast majority of whom are ready to return to the half-destroyed and weakened Ukraine for its reconstruction (370,000 people have returned to Ukraine since the beginning of the war).

Everything will depend on how long it will take to rebuild the economy and create workplaces with the right level of wages and what the guarantees of secure existence will constitute.

Source:

Kateryna Markevych

Leading Expert, Economic and Social Programmes


Born in 1989 in Dnіpro

Education:

Dnipro National University named after Oles Honchar (specialty: International Economic Relations, Bachelor's Degree, 2010)

T. Shevchenko Kyiv National University, Institute of International Relations (specialty: International Economic Relations, Master's Degree, 2012)

External PhD student of the National Institute for Strategic Studies. Subject of dissertation is "FDI influence on the economic security of Ukraine"

Internships:

2009 — Land Commission and Commission on Environment of the Dnipropetrovsk City Council

2009 — International Business Department of the Dnipropetrovsk Regional Public Administration

2011 — Secretariat of the Committee on Foreign Affairs of the Verkhovna Rada

2012 — Department for Facilitation of Investment Activity and Regional Development of the Ukrainian Chamber of Commerce and Industry.

Employment:

2012 — Consulting Company "H-aRt"; Public JSC "Ukrnaftokhimproekt" (engineering company)

October 2012 – March 2014 — Junior Expert of Economic Programmes of the Ukrainian Centre for Economic and Political Studies named after O. Razumkov

Since March 2014 — Expert of Economic Programmes of the Ukrainian Centre for Economic and Political Studies named after O. Razumkov

Field of Research: international investing activity, foreign economic policy, economic security, FDI in MSE

Author of scientific articles and a participant of more than thirty scientific conferences devoted to investment activities of the Ukrainian economy, foreign investment activity in the countries BRICS group

(044) 201-11-98

markevych@razumkov.org.ua

kateryna.markevych