Not a single day passes without headlines in European newspapers describing the mass influx of refugees into the continent from Africa and the Middle East. While the business impact of this humanitarian catastrophe has so far been small, growing tensions between Western and Eastern Europe over migrant relocation and border crossing issues are worrisome developments that could rattle the European Union (EU).
The latest figures for the first half of 2015 show a 78% year-over-year increase in immigration to Europe, with the majority of the migrants arriving in Greece and Italy. However, when current numbers are put into perspective, the refugee problem looks much smaller than the current newspaper headlines might suggest. Since 2012 around 1.9 million people came to the EU as asylum seekers. This is a meager 0.4% of the total population of the EU.
The number of refugees in Europe looks even smaller if you compare it with countries like Lebanon, which has 1.1 million refugees, or about 25% of the country’s population in 2012. Jordan has 660,000 refugees, which represents about 10% of its population.
Some European countries, however, have been impacted more severely by the current crisis than others. Greece is the main port of entry for refugees due to its geographical location and its many islands in the Aegean Sea that are only a few kilometers off the Turkish coast.
The Balkan states of Macedonia and Serbia have so far served as the main overland transit countries for refugees from Afghanistan, Iraq, Libya, and Syria to enter Hungary, which saw a 1,100% year-over-year increase in asylum applications in January-June 2015. Once they entered Hungary, migrants could, until recently, travel to Austria. From there migrants could travel without additional border checks further into Germany and Sweden.
But since Hungary has fenced off its border with Serbia and is now building fortifications on its borders with fellow EU members Romania and Croatia, the humanitarian situation in the Balkans is getting worse, especially at the onset of autumn.
From a supply chain perspective, the refugee crisis has only caused minor disruptions so far. Train services between Vienna and Budapest as well as between the Austrian city of Salzburg and Germany’s Munich have been suspended. In addition, migrants trying to enter the UK via the Channel Tunnel have caused occasional disruptions of the Eurostar service between London and Paris/Brussels.
Road transport has been especially impacted on a stretch of the E52 motorway at the Austrian-German border (also causing problems for cross-border commuters) as well as the Serbian-Croatian border (which was closed for several days).
Looking ahead, Dun & Bradstreet expects the number of asylum seekers in Western Europe to drop in the next few weeks. Colder weather will make it harder for refugees to leave their home countries and cross the Mediterranean.
In addition, EU leaders at their September meeting agreed on several measures aimed at keeping migrants out of Europe. The EU’s donation to the World Food Program is set to rise, while financial support for Turkey, Lebanon, and Jordan will also be increased. In addition to that, the EU’s external borders will be made safer (which means that illegal border crossings will be made harder).
However, the security situation in the Middle East as well as in North Africa is not likely to improve in the near to medium term. As a result, the Schengen borders will be tougher to penetrate, which could simply increase the refugee crisis in neighboring countries like Romania (which is in the EU) and non-EU countries such as Macedonia and Serbia in spring 2016. (The Schengen Area is the passport-free zone of travel between 23 EU states as well as Iceland, Norway, and Switzerland.)
The number of refugees is still too small to solve Europe’s demographic problems such as the region’s declining populations related to low birth rates. But the influx has already led to political problems. The Czech Republic, Hungary, Romania, and Slovakia all objected to an EU plan to relocate 120,000 refugees from Greece and Italy. In Western European countries, anti-immigrant (and very often anti-EU) parties are performing well in polls and regional elections.
In this light, EU policy makers are facing an increasing problem of counterbalancing the interests of the domestic electorate — which in some countries fiercely opposes migration — on one side and saving the lives of refugees and solving a humanitarian catastrophe on the other side.
Having previously worked for the European Parliament in Brussels, Markus Kuger joined D&B’s office in Marlow/United Kingdom in June 2010. In his role as Senior Economist in D&B Macro Market/Country Insight Products, he is writing about his home country Germany as well as the UK, France, the Netherlands, and Poland.