The EU is taking on the challenge of taking in millions of war refugees from Ukraine

The EU responded quickly to the millions of people fleeing the war in Ukraine, invoking rules that allow uprooted people to stay, work and find school for their children, in stark contrast to the Union’s far less welcoming approach to previous refugee crises.

Despite the strain these refugees are now putting on member states’ public services, many economists argue that the tax burden should be manageable — and that Ukrainians will be well-positioned to find work in tight labor markets where their skills are very vulnerable are asked.

The sheer scale and speed of the exodus since the invasion began on February 24 makes this a daunting challenge. “This is bigger than any other humanitarian crisis since World War II,” said Jean-Christophe Dumont, head of the OECD’s migration department, noting that between 2014 and 2017 Poland had already taken in as many refugees as arrived in the EU, while Hungary took in five times as many migrants as it normally does in a year.

But the bloc’s response gives hope that it has learned the lessons of the 2015 Syrian refugee crisis and can avoid a public backlash by adopting a more collaborative approach, with the initial wave of community aid bolstered by private sector aid and more formal state support will .

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

The biggest change from previous crises is the EU’s decision to activate the “Temporary Protection Mechanism” that gives the millions who have fled Ukraine since the conflict began the right to live and work in any member state, with access on healthcare, housing and education.

More than 3.2 million people have fled Ukraine since the start of the Russian invasion — more than the number who entered Europe from Syria in the two years of 2015-16 in a matter of weeks. The EU’s failure to share responsibility for refugees since this crisis has left thousands behind barbed wire at borders or crammed into camps in the least equipped countries.

“It’s very different than it used to be,” says Hanne Beirens, director of the Migration Policy Institute Europe, a Brussels-based think tank, which argues that the protection mechanism will reduce the cost of taking in refugees because they can move to where they are Have family or community ties, or see the best prospects of finding work.

While Poland is already home to an estimated 1-2 million Ukrainians — most of whom have arrived since Russia annexed Crimea and supported separatists in eastern Ukraine in 2014 — there are also large communities in Italy, the Czech Republic, Germany and Spain.

Bar chart of estimated number of Ukrainian residents (000), 2020, showing that several European countries have large Ukrainian diaspora

Goldman Sachs estimated that the fiscal cost would be a “very manageable” 0.1 if EU countries took in 4 million Ukrainians in the coming year and opted to settle in a similar pattern to existing communities with similar financial support to previous refugee crises would decide -0.2 percent of the gross domestic product in the four largest economies in the EU.

The OECD’s Dumont was more cautious, emphasizing the extreme uncertainty about how many people would leave Ukraine, which countries they might move to, how long they would stay and the disparity in financial and practical support from governments.

Big numbers were likely stay in PolandGiven 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, frontline countries are struggling to cope. Non-EU member Moldova appealed to the UN for help moving refugees to Romania and beyond Warsaw’s mayor asked for more systematic support from the West to prevent public services from being overwhelmed.

As estimates of the likely exodus rise from the UN’s original estimate of 4 million, the OECD underscored the need for a concerted effort and urged the EU to share the financial burden with the countries most affected.

Beirens said that unlike in 2015, when the European Commission struggled to allocate funds to respond to the Syrian crisis, it now has a more readily available pot in its Asylum, Migration and Integration Fund.

Rafal Benecki, a Warsaw-based economist for ING, claimed that the cost of meeting the refugees’ immediate needs would be “manageable locally”, with Polish households and local authorities taking the lead and state funding following. He estimates that spending to support a refugee population of 2.5 million for six months to a year would be 20 to 40 billion zlotys ($4.7 to 9.4 billion), which is 0.7 to 1. 4 percent of GDP.

European authorities have acted quickly to address practical issues, offering access to public transport and communications networks and looking for ways to convert hryvnia savings into euros.

But helping refugees find work and become self-employed should also be a priority, Beirens said – by funding language classes and childcare and recognizing professional qualifications.

Nicolas Schmit, the EU’s labor commissioner, said last week that Brussels would work with public employment services to identify gaps for refugees to fill. “These people really want to work,” he said, “so we have to make it easier for them to integrate.”

With labor shortages across the eurozone and unemployment rates in Poland and Hungary well below the EU average, employers are likely to welcome refugees more readily than has been the case in the past.

ING’s Benecki said the first wave of Ukrainian migration after 2014 had already boosted Poland’s annual GDP by about a percentage point. The newcomers – if they decide to stay – would help fill the chronic shortage in both skilled sectors such as education and IT services, and low-skilled areas.

“We don’t know how long the conflict will last,” he said. “In the longer term, some people will probably stay. I hope that they too can benefit and contribute to the economic upswing of this country.” The EU is taking on the challenge of taking in millions of war refugees from Ukraine

Adam Bradshaw

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