The recent acceleration in the number of asylum
seekers is creating important absorption and
policy challenges that could strain public services
and government finances in exposed countries,
but is expected to provide some marginal support
to Euro Area-wide growth in the short-term
through rising public expenditure and private consumption.1
Over the medium term, the influx
may also help to meet labor shortages in the face
of an ageing population. However, the ultimate
effect on growth and public finances remains
highly uncertain, depending on the performance
of migrants in the labor market (Münz et al. 2006,
OECD 2014) as well as the coherence of national
and EU policy responses.