Immigration will hamper Europe's growth, Kilkenomics to hear
Europe's economic growth will be hampered by the influx of immigrants, top economist Megan Greene has told the Sunday Independent. The influx of immigrants into Europe will not address skills shortages as expected, Manulife Asset Management's chief economist said.
"The refugee crisis will shape Europe in a way that investors are not anticipating," Greene said.
She was speaking in advance of Kilkenomics, David McWilliams's Kilkenny-based economics festival that starts next Thursday.
"The assimilation of foreign workers will take much longer than expected. In the meantime you will see a huge black economy emerge that will lead to pressure on the social and political side.
"You are talking about people who don't speak European languages, who will take about two years just to get registered for worker status.
"In the short-term, that will be a drag on growth. If refugees are successfully integrated, then yes, that should mean medium-term growth - but you have a lot of pressure in the interim. We are already seeing the consequences of that in the political swings to the far right around Europe."
Criticism of economic migrants as opposed to refugees is misfounded, Greene said. "By their nature, these people are moving to work. They are good for economies. This is supported by statistics - but not well understood in countries like the UK, where the media is critical of economic migrants."
Britain's potential exit from the UK, Greene added, will come down to immigration.
"But very few refugees want to get to the UK. They're trying to get to Germany and Sweden. And those being held back by French forces at Calais - does the UK really think France will continue to protect Britain's borders if Britain leaves the EU?"
A British exit from the EU would be "disastrous" for Ireland, she added, with ramifications for Ireland's low corporation tax rate, which the UK has supported.
"Ireland's model as a springboard for companies into the EU will not work if the country's corporation tax rises," she said, conceding that country will probably not be able to maintain it for much longer.
"Ireland needs to focus more on indigenous industry, which it has done very successfully with agri-foods. But that probably won't provide the same amount of rapid growth it is enjoying now."
Sunday Indo Business