EU states seek budget leeway to cope with migrants crisis

As they cope with the worst migration crisis in decades, European Union states want some flexibility from the European Commission when it reviews their draft budget plans - but the commission says the EU fiscal rules must be respected. 

PHOTO: AFP

SEP 12, 20155:52 AM

[LUXEMBOURG] As they cope with the worst migration crisis in decades, European Union states want some flexibility from the European Commission when it reviews their draft budget plans - but the commission says the EU fiscal rules must be respected.

Since the beginning of the year, about 500,000 migrants have reached the European Union, fleeing war and poverty in their home countries.

The economic impact of the influx should be taken into account when the European Commission reviews national budgets in the coming weeks, Luxembourg Finance Minister Pierre Gramegna said as EU finance ministers gathered on Friday in Luxembourg for a regular monthly meeting. "We have asked the Commission to make an economic and financial analysis of what the financial impact of the refugees crisis can be," Mr Gramegna told a news conference at the end of the meeting.

Luxembourg holds the six-month presidency of the EU and spoke on behalf of several EU countries who raised the issue during the meeting. "We will examine that in the framework of our rules because we must also stick to the commitments," EU Economics Commissioner Pierre Moscovici told reporters.

European Commission President Jean-Claude Juncker proposed on Wednesday a plan to relocate a total of 160,000 asylum seekers across EU countries. He estimated a cost to the EU of 780 million euros (S$1.24 billion) over two years. EU states are expected to contribute with national resources, too.

Mr Moscovici, who is in charge of supervising euro zone budgets, agreed to examine the economic impact of the crisis and may present his findings on Oct 5, the next meeting of euro zone ministers. Euro zone countries are due to submit their draft budgets to Brussels on Oct 15.

The European Commission has the authority to send back the draft budgets and push for changes, thanks to the new rules adopted after the euro zone's 2009-2014 debt crisis.

Mr Moscovici said that "several" countries asked for the economic analysis, which can lead to some leeway on the euro zone's strict budget rules. Beside Luxemburg, Austria, Italy and Ireland raised this issue.

The outcome of the analysis is far from clear. Some eurozone states, such as Germany, are likely to oppose too much flexibility for countries with high public debt and deficit.

REUTERS