The positive impact of EU migrants

ECAS interview

  • “Benefit tourism” is highly topical in the EU today with the UK talking of quotas on immigrants and Germany planning to establish a six-month maximum stay for migrant jobseekers. But what exactly is “benefit tourism”?

“Benefits tourism” is a term to describe a situation where a migrant moves to a country with the sole intention of claiming social assistance there. 

It is not the same thing as “benefits fraud” which involves the making of fraudulent claims for social assistance.

  • Has this concept intensified or decreased in Europe, ten years later, after the largest enlargement of the EU in 2004?

The debate about benefits tourism is not a new phenomenon and has been a topic of controversy in the UK since at least 1994. 

The debate has intensified since the Big Bang Accession in 2004 and has spread beyond the UK to include Austria, Germany and the Netherlands.

Denmark is the latest country where the controversy has arisen, although the Confederation of Danish Employers has published its own study showing EU migrants are net contributors to the Danish economy.

  • According to your 2014 study, migrants from EU countries have made positive contributions to the UK, Germany, Austria and the Netherlands. What kind of contributions?

Our study looked at the fiscal impact of EU migrants in these four EU countries.  We found that EU migrants are net contributors to the public finances in Austria, Germany, the Netherlands and the UK.

This means that, on the whole, EU migrants contribute more to public finances by way of income taxes and VAT than they take out through welfare benefits and other social assistance.

We estimate that EU migrants contributed €19 bn. to public finances in Germany in 2013 and up to €25.3 bn. if we factor in consumption taxes such as VAT.

In the UK, our study shows that EU migrants contributed €2.1 bn. to the Treasury in 2013 and reaches € 7.7 bn. When taking into account VAT and other indirect taxes. 

For Austria, our estimates show that EU migrants contributed €1.7 bn. to the public purse in 2013 or €2.6 bn. if we factor in public revenue generated from consumption.                                                                                        

As for the Netherlands, the net fiscal contribution of EU migrants was €0.5 bn. and trebles to €1.5 bn. after taking into account taxes raised from consumption.      

Our estimates are based on publicly available data and information obtained through freedom of information requests.

These four countries were selected because the governments of these countries wrote a letter to the Presidency of the Council of the EU in 2013 calling for further restrictions on free movement to be imposed and citing benefits tourism as the reason for doing so.

  • What challenges did you face in defining the migrant population?

The collection of the data from the targeted countries – the UK, Germany, Austria and the Netherlands – took more time than initially anticipated due to the lack of uniform and publicly available data on migrants’ contributions and spending by nationality. This necessitated the checking of different sources and the collection of certain statistics through access to information requests to the relevant institutions in the four countries.

This is why one of the Recommendations (“Strategies”) in our Right to Move campaign is that the Member states collate better statistics on the free movement of persons.

The collection of data on the free movement of EU citizens and their family members would encourage better evidence-based policy-making by the Member States as well as the EU.

  • Is the study’s conclusion also the case with migrants from non-EU countries?

No. Our study focused solely on the fiscal impact of EU migrants and their family members.

There have been some studies looking at the impact of both EU and non-EU migrants in specific countries, such as the study undertaken by University College London in 2013.

  • You have also mentioned in the study that despite migrants being more active in the labour market and have a lower unemployment rate compared to the native population, they receive significantly less benefits and wages. So what is behind political talks, media news and researches claiming that many migrants are leeching on social welfare systems of EU states?

It is true that in general migrants are less likely to claim, and therefore receive, benefits that they are entitled to.

For government and mainstream politicians, it is likely that allegations of “benefits tourism” provide a convenient explanation for the imposition of budgetary cuts and the reduction in welfare support by the state following the economic crisis.  

For more reactionary or xenophobic parties, “benefits tourism” is used as an illustration of the negative effect that migrants have on society.

  • Why are such claims getting increasingly popular among politicians and citizens than they ought to be?

Benefits tourism provides a narrative that makes the cuts more palatable to the public. It is a time-honoured stratagem to blame migrants as a means to deflect attention away from the genuine reasons for a country’s woes, such as the mismanagement of public finances.

  • The 2013 European Commission study on the impact of intra-EU migrants on social security systems said that there is little evidence of “benefit tourism” in Europe, contrast to what some politicians and experts have claimed. Is “benefit tourism” a reality or a myth in the EU?

Individual cases of benefits tourism may exist, but they are very limited. As the recent judgment of the EU Court of Justice in the Dano case shows, such cases are often short-lived episodes because the national authorities take relatively swift action to terminate the payment of benefits. 

The scale of the problem is heavily contested.  None of the European governments which have raised the issue have been able to provide empirical evidence that quantifies the scale of the problem.

What is clear is that several independent studies have shown that, on the whole, EU migrants contribute more to the public finances than they take out.

  • Last November, the European Court of Justice has ruled that national governments have the power to exclude migrants who are non-job seekers from receiving unemployment benefits. Given this court decision, does the EU still adhere the fundamental freedom of movement of the Union?

The Dano case does not call into question the free movement of persons as enshrined by the EU Treaties. The case has only confirmed that under the free movement rules, EU citizen who do not work and are not looking for work will not be able to claim benefits unless they can first demonstrate that they have sufficient resources of their own. The European Court of Justice simply reaffirms the EU rules already in existence.

  • Ironically, the supposed “benefit tourism” crackdown last November has been supported by several EU countries (UK & Germany) who have greatly benefitted from their large migrant population. What is behind this growing fear of migrants?

As we mentioned before, blaming migrants is not a new phenomenon.  The issue is being exploited for several different political purposes. What is new is the extent to which those concerns have been brought up at European level without being substantiated by numbers and figures. Moreover, those concerns have been voiced by the  Interior Ministries of the UK, the Netherlands, Germany and Austria, which usually are not responsible for either European migration matters nor social benefits claims. This is a worrying nationalistic trend, which goes against the rights and values that the EU has created.

  • What is the role of civil society organisations like ECAS in changing public opinion on migrants and “benefit tourism”?

Free movement is the achievement of the EU that is the most cherished by the majority of European citizens.  ECAS provides legal advice to more than 20 000 EU citizens who exercise their right of free movement in the EU annually and has an in-depth expertise in this area.

Through its work in the field of EU citizens’ rights for more than 24 years, ECAS has developed knowledge that enables the organisation to voice legitimate concerns and to put forward informed suggestions for possible solutions  to  policy-makers when free movement rights are under threat. We believe that every discussion should be based on facts and evidence rather than playing on people’s fears. Therefore we encourage evidence-based decision-making by the EU and national institutions alike.

 retrieved from The New European, issue 4.