\n
A comprehensive asylum policy for Europe, I believe, should establish a firm and reliable annual target of 300,000-500,000 refugees. This is large enough to give refugees the assurance that they can eventually reach their destination, yet small enough to be accommodated even in today\u2019s unfavorable political climate.<\/p>\n
There are established techniques for the voluntary matching of supply and demand in other fields, such as matching students to schools and medical interns to hospitals. In the case of refugees, those determined to go to a particular destination would have to wait longer than those who accept the destination allotted to them. Registered asylum-seekers could then be required to await their turn where they are currently located.<\/p>\n
This would be much cheaper and less painful than the current chaos, of which the migrants are the main victims. Those who jump the line would lose their place \u2013 which should be sufficient inducement to obey the rules.<\/p>\n
This plan would require at least \u20ac30 billion a year. This includes providing Turkey and other \u201cfrontline\u201d countries enough financial support to allow the refugees living there to work and send their children to school; creating a common EU asylum agency and border force; addressing the humanitarian chaos in Greece; and establishing common standards across the EU for receiving and integrating refugees.<\/p>\n
The EU undoubtedly has the capacity to raise at least \u20ac30 billion a year, which is less than 0.25% of its 28 members\u2019 combined GDP of more than \u20ac16 trillion, and less than 0.5% of total spending by its national governments. What is lacking is the political will. The EU\u2019s fiscal rules restrict most member states from running larger deficits and financing them by issuing new debt. That is why the question has not even been raised, let alone seriously considered.<\/p>\n
Sooner or later, new taxes will have to be levied to cope with the refugee crisis. Scraping together insufficient funds year after year won\u2019t do the job. By contrast,”surge funding”\u00a0would enable the EU to respond more effectively to some of the most dangerous consequences, by helping to tip the economic, political, and social dynamics away from xenophobia and disaffection toward constructive outcomes that benefit refugees and countries alike. In the long run, this would reduce Europe\u2019s total spending to contain and recover from the refugee crisis.<\/p>\n
There is a strong case to be made for using the EU\u2019s balance sheet to finance the surge. With global interest rates at or near historic lows, now is a particularly good time to utilize the EU\u2019s triple-A credit. Doing so has the additional advantage of providing a much-needed economic stimulus. The amounts involved are of macroeconomic significance, especially as they would be spent almost immediately and exercise a multiplier effect. A growing economy would make it much easier to absorb immigrants, whether refugees or economic migrants.<\/p>\n
The question is how to use the EU\u2019s triple-A credit without arousing opposition, particularly in Germany? First, we must recognize that the EU is already a triple-A borrower. During the eurozone crisis, the EU established financial instruments such as the European Financial Stabilization Mechanism (EFSM) and the European Stability Mechanism (ESM), capable of quickly tapping tens of billions of euros on attractive terms.<\/p>\n
These entities, which retain considerable borrowing capacity, should be redirected to secure the surge funding required to address the migration crisis. Using an existing mechanism, albeit for a new purpose, would be much more efficient than creating a new one. It would require only a political decision \u2013 one that could be taken on short notice.<\/p>\n
Two sources of money \u2013 the EFSM (for eurozone members) and the Balance of Payments Assistance Facility (for non-eurozone EU members) \u2013 should be put to the task. Both are backed entirely by the EU budget \u2013 and therefore do not require national guarantees or national parliamentary approval. Their combined gross borrowing capacity is \u20ac110 billion, a number corresponding to the EU budget\u2019s annual revenue.<\/p>\n
The Balance of Payments Assistance Facility\u2019s \u20ac50 billion of borrowing power is almost completely unused. The EFSM has extended some \u20ac46.8 billion in loans to Portugal and Ireland but has substantial spare capacity. They jointly have well over \u20ac60 billion of capacity, and this capacity grows each year as the loans to Portugal and Ireland are repaid.<\/p>\n
As with the euro crisis, the refugee crisis requires a quick response. But it differs from the euro crisis in that the beneficiary countries \u2013 Jordan, Turkey, and Greece \u2013 are on the front lines of what is a collective European undertaking. They are entitled to grants, and should not be obliged to repay the monies they receive. Instead, the EU and its member states must find new sources of tax revenue to repay the surge funding.<\/p>\n
The new tax revenue could come from a variety of sources, including the EU-wide value-added tax, which already provides revenue; a special tax on petrol, as German Finance Minister\u00a0Wolfgang Sch\u00e4uble\u00a0has suggested; or a new tax on inbound EU travel and on visa applications, which would shift some of the burden onto non-EU citizens.<\/p>\n
While it will take a long time to complete the process of levying new taxes, bondholders will want to be assured that their bonds will be serviced and repaid. That\u2019s why the EU must guarantee that it will generate the new tax revenue by the time it is needed, even if the exact source has yet to be determined.<\/p>\n<\/div>\n
<\/p>","protected":false},"excerpt":{"rendered":"
by George Soros Published in Project Syndicate, on April 11th,\u00a02016 The asylum policy that emerged from the European Union\u2019s negotiations last month with Turkey became effective on April 4, when 202 asylum-seekers were deported from Greece. The policy has four fundamental flaws. It was negotiated with Turkey and imposed on the EU by German Chancellor […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[4],"tags":[],"acf":[],"_links":{"self":[{"href":"https:\/\/staging.solidaritynow.org\/en\/wp-json\/wp\/v2\/posts\/2637"}],"collection":[{"href":"https:\/\/staging.solidaritynow.org\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/staging.solidaritynow.org\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/staging.solidaritynow.org\/en\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/staging.solidaritynow.org\/en\/wp-json\/wp\/v2\/comments?post=2637"}],"version-history":[{"count":2,"href":"https:\/\/staging.solidaritynow.org\/en\/wp-json\/wp\/v2\/posts\/2637\/revisions"}],"predecessor-version":[{"id":3312,"href":"https:\/\/staging.solidaritynow.org\/en\/wp-json\/wp\/v2\/posts\/2637\/revisions\/3312"}],"wp:attachment":[{"href":"https:\/\/staging.solidaritynow.org\/en\/wp-json\/wp\/v2\/media?parent=2637"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/staging.solidaritynow.org\/en\/wp-json\/wp\/v2\/categories?post=2637"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/staging.solidaritynow.org\/en\/wp-json\/wp\/v2\/tags?post=2637"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}