An alternative perspective

13 November 2015

The Migrants: the Longer-Term Political and Economic Impact for Europe

Winter looms and migrants from the Middle East and Africa continue to make their way towards Europe. Some are fleeing  for their lives, others simply seek a better life and broader horizons for their children. All are making life more  difficult for European leaders and institutions struggling to cope with a dizzying array of security and economic challenges. Europe’s governments know the migrant crisis won’t solve itself, but early efforts to coordinate solutions fall far short of what will be needed. The broader implications of this crisis are far-reaching.

Baby Steps and Bitter Divisions

EU ministers have agreed a plan to resettle 160,000 refugees and tighten the EU’s external borders. They have committed new funds for humanitarian aid for camps in North Africa and the Middle East to make conditions there tolerable enough to discourage their occupants from testing those borders. They have promised to do more to stabilise Syria, though what this means remains to be seen.

Given the rising tide of migrants, these solutions are credible only as first steps. It is not promising that an agreement to share the burden of welcoming 160,000 people should generate so much friction among European governments, when Germany alone may receive as many as 1.5 million asylum requests this year. Improving life in the refugee camps will help the migrants, those operating the camps, and the governments that grant them space and services, but the migrants can’t stay there forever. There is not enough money or manpower to secure borders around the Greek islands or Turkey’s coastline. Smaller Balkan states are under increasing pressure. The Russian bombing in Syria has made a difficult security situation there much more complex and dangerous.

Agreements in Europe depend on consensus among EU member states, and the migrant crisis has exposed widening divisions, particularly as central and eastern governments in Hungary, Poland and the Czech Republic adamantly oppose any deal that brings them significant numbers of refugees. Slovak Prime Minister Robert Fico has said he will not implement the agreement already reached. There will be more debate, more anger, new proposals, and new deals in months to come, but the fall-out from this unprecedented crisis will continue into 2016 and beyond.

New Pressures on Continuing Challenges

Though the crisis remains in its early days, it is already clear that it will have a wide range of important impacts. We can expect negotiations with Greece over management of its debt to become contentious again in 2016, and it is not clear whether a German chancellor contending with the political fall-out of her open door approach to migrants will have the political room for manoeuvre needed to manage disputes between Greece and her other creditors.

In Britain, the flood of refugees will give voters added incentive to keep Europe’s problems at arm’s length, perhaps by voting for exit when the country hold its long-awaited Brexit referendum, probably in 2016. The UK is not party to the Schengen Agreement (‘Schengen’), which allows free movement across European borders, but desperate refugees continue to try to enter the country. Fear that Britain’s government cannot control the country’s borders will further empower the UK’s already emboldened Eurosceptics. Some of Britain’s Conservative Party now fear the political power of the United Kingdom Independence Party from their right more than they fear challenges from Jeremy Corbyn’s marginalised Labour Party from the left, making it more difficult in 2016 for Prime Minister David Cameron to rally support for the EU from many of his own backbenchers.

Immigration controversies will also have a complicated impact on European relations with Vladimir Putin’s Russia. In the near term, Russia’s air war in support of Syrian President Bashar al-Assad, a long-time ally, will create further turmoil in Syria and push more migrants north towards Europe. Over time, however, any eventual increase in stability inside Syria could slow the surge of refugees, fuelling a tougher debate in Europe over whether to ease, or even lift, EU sanctions on Russia. That outcome will become much more likely if the fighting in eastern Ukraine remains limited.

The migrant crisis could also weigh on European relations with the US. In particular, the Transatlantic Trade and Investment Partnership (‘TTIP’), an enormous potential trade deal now under negotiation, is crucial for the future of transatlantic ties, particularly as US policymakers turn their attention increasingly towards trade opportunities and security challenges in Asia. TTIP is highly unlikely to move forward at a time when European leaders are powerfully distracted by the crisis – and their ability to offer trade concessions is limited by the need to make politically unpopular decisions on how to manage migrants. As a result, a deal that Europe badly needs to revitalise its economy looks increasingly at risk.

Finally, add the migrant challenge to the increasingly long list of issues distracting European leaders from the unfinished business of mending the Eurozone’s original design flaws. Tighter coordination of fiscal policy and more effective regulation of Europe’s banking sector are becoming ever more distant goals.

Open Europe?

The greatest lasting threat that the migrant crisis poses for the larger European project focuses on Europe’s borders. Schengen is a powerful symbol of European unity. 22 of the EU’s 28 member states – and four non-EU states – are Schengen members. Within the EU, only the UK, Ireland, Bulgaria, Romania, Croatia and Cyprus remain outside Schengen, which speeds the flow of commerce across borders and reduces costs, boosting economic activity. Schengen rules allow a country to reimpose border controls on a temporary basis under emergency conditions, and several EU governments have responded to the migrant crisis with temporary border restrictions.

In 2016, we can expect more countries to tighten their borders, and there is no guarantee that elected officials will find a politically convenient moment to lift those restrictions. After all, without border controls, there is no way to ensure that migrants will remain in the countries that have agreed to accept them, giving the governments that least want them an opportunity to pressure them to leave. Each country will have an incentive to become less hospitable than their neighbours towards immigrants. Under EU law, Schengen members who fail to abide by the agreement’s terms face fines, but a revolt by multiple governments may well destabilise this central pillar of European unity. This is a small but growing threat to the common market.

A flood of Middle Eastern migrants, arriving at a time of new threats from ISIS and its followers, boosts the popularity of opposition parties that want to close the door. In Poland, anti-EU sentiment helped the conservative Law and Justice Party win elections in October. It also forces more mainstream parties to toughen their rhetoric. The trend is obvious in Hungary, where Prime Minister Viktor Orbán has adopted a hardline approach towards refugees in part to ensure that Fidesz, his right-wing party, can check the growth of Jobbik, a far-right party. The Czech Republic and Romania joined Slovakia and Hungary in voting against last month’s first-step agreement.

We’re also seeing a nationalist surge in Western Europe. In Italy, the Northern League is using the refugee crisis to undermine support for Matteo Renzi’s government. Paris’s Charlie Hebdo attack set Europeans on edge in early 2015. In August, two asylum seekers killed a mother and son shopping at an Ikea store in Västerås, Sweden. These attacks underscore the vulnerability of those who welcome migrants. Recent opinion polls show the Swedish Democrats, a far-right party with neo-Nazi ties, won just 5.7 per cent of the vote in parliamentary elections in 2010. In 2014, they won 12.9 per cent, and opinion polls from recent months place the party above 25 per cent. In France, a leader of the EU, Marine Le Pen and the right-wing Front National lead early opinion polls ahead of the 2017 presidential elections.

German Leadership

As with every important challenge now facing Europe, Germany is the crucial player. Germans and their elected officials have rallied to help huge numbers of Muslim migrants. For the moment, Germany’s door is likely to remain wide open, but the surge of outsiders into the country will surely have a political impact. The country received about 200,000 asylum requests in 2014, but Chancellor Angela Merkel says Germany will welcome up to 800,000 refugees in 2015, and some recent estimates place the number as high as 1.5 million. Europe’s strongest economy was already the destination of choice for huge numbers of refugees, and its willingness to accept more may well encourage those still in the Middle East that now is the time to bring their families north.

There are many reasons why Europe’s right is on the rise. But an incident involving Muslim migrants – or homegrown Muslim citizens – can further fuel their power to win votes with a Eurosceptic message. A similar attack in Germany might shift opinion sharply against Chancellor Merkel in ways that make it that much harder to muster the European leadership needed to bolster the European project as it comes increasingly under stress.

Europe has faced tough challenges before. In the end, both Greece and Britain are likely to remain within the EU. The far right’s gains are likely to prove temporary. France is unlikely to elect Marine Le Pen president. Europe will muddle through. But the flood of migrants is making all these problems more complicated, and we ignore the longer-term risks at our peril.

Ian Bremmer is president of Eurasia Group, the world’s largest political risk consultancy. He is also a columnist for Slate, a contributing editor at The National Interest, and a political commentator on CNN, Fox News and CNBC

Go back