European Commissioner for Economic and Financial Affairs Pierre Moscovici said during an interview at CNBC over the weekend that Europe’s refuge crisis could boost economic growth by forcing governments to increase public expenditures.
“This is a very emotional crisis and it is a political challenge of high importance, but if I look at the economics and just the economics, I’m persuaded that this can be an opportunity capable of driving 0.2 to 0.3 percent additional growth,” said Moscovici.
According to the European Commission, the Eurozone’s combined government deficit will drop to 1.9 percent of GDP this year, from an estimated 2.2 percent in 2015.
“Why? Due to the fact that we, especially Germany, have to address the welcoming and the integration of those who are moving away from regimes threatening their lives,” said Moscovici.
As CNBC reported, “These support measures include providing refugees with employment opportunities, basic income support, housing, health care, education as well as an overhaul of the European Union’s asylum policy and improvement of border controls.”
Countries such as Germany, Austria, and Sweden are already set to increase their public spending by an additional 0.5, 0.3, and 0.9 percent, respectively.
Moscovici stressed that this additional spending will prove most beneficial to Europe’s economic growth.
“The problem that still exists in the E.U. is that we suffer from an investment gap, we need to invest more in the future,” he said.
Moscovici was optimistic about the overall state of Europe’s economy.
“I would say that we’re now in the first year of positive growth. If I now look at the 28 countries in united Europe, I see that 27 of them are in positive territory for next year,” he told CNBC, noting “solid” growth rates of 1.5-2 percent over the next two years.
(Source: CNBC)
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