The refugee crisis takes a deadly turn

Matthew Partridge looks at the latest developments in Europe's refugee crisis, as the death of a young Syrian refugee catches Europe’s attention, and Hungary doubles down on its hardline stance.


Hungary has reinforced its border with Serbia

The death of a young Syrian refugee has caught Europe's attention. Meanwhile, Hungary's leader doubles down on his hardline stance. Matthew Partridge looks at the latest developments in Europe's refugee crisis.

What's going on?

Photos of the bodyof a drowned three-year old Syrian refugee, Aylan Kurdi, have led to a public outcry against Europe's policy towards migrants, especially in Britain. After a large amount of public pressure, David Cameron has been forced to change policy, grudgingly pledging to take 4,000 refugees directly from camps around Syria. He has also said that Britain will continue to take "thousands" of other asylum seekers from the war-torn Middle Eastern country. Meanwhile, Hungary's president, Viktor Orbn, has said that Hungary will not take any more refugees, nor let existing ones travel to Germany, and has closed the border with Serbia.

So, what happened before?

Until recently, the only refugees taken in by the UK were those who had made a claim for asylum. The problem is that to do this they first had to get to the UK, which is difficult given the extensive border controls. According to official figures, in the 12months to 2 June, 204 Syrians applied for asylum 87% of them accepted, implying that over 1,900 were let in.

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up

Since the conflict began in 2011, an estimated 5,000 have been granted asylum. There is also a scheme that allows countries to take refugees vetted by the UN directly from the camps in Turkey. However, Britain took only 200 in this way.

Why the change of mind?

The government argues that flying selected refugees to the UK directly from the camps will make it much easier to reach genuine refugees. It will also encourage them to remain in the camps, rather than make the dangerous journey via the back of trucks or across thesea in flimsy boats.

However, critics counter that 4,000 is still a very small number, and much less than the 10,000 recently proposed by Labour leadership candidate Yvette Cooper. To put these numbers into perspective, there are 115,000 people who have non-domicile status in the UK, which can be retained for up to 15 years, and are therefore able to escape paying tax on worldwide investment income.

What's going on in Hungary?

Meanwhile the HungarianPM has been attacked for maintaining his harsh anti-migrant stance. Not only has he temporarily closed the border with Serbia, he has said that Hungary will not take part in any refugee relocation scheme. While his refusal to allow migrants to leave Hungary for Germany seems paradoxical, Orbn argues that Angela Merkel's relatively liberal policies only encourages economic migrants to make the journey. However, his concerns about Hungary being at risk of losing its "identity" suggest that his stance may be at least partly down to racism.

Does Europe need more economic migrants?

While the focus has been on the moral case for taking refugees, there are also demographic reasons for taking economic migrants. Italy and Greece have high unemployment, but Germany's ageing population means that it has a shortage of skilled younger workers.

Some commentators have suggested that any increase in refugees to the UK should be counterbalanced by restrictions on immigration from the EU. However, this would make little sense, since EU immigrants (who account for around half of immigration to the UK) make an estimated net contribution of £20bn to the UK Treasury. Contrary to myth, Eastern European migrants also contribute around £5bn.

Dr Matthew Partridge

Matthew graduated from the University of Durham in 2004; he then gained an MSc, followed by a PhD at the London School of Economics.

He has previously written for a wide range of publications, including the Guardian and the Economist, and also helped to run a newsletter on terrorism. He has spent time at Lehman Brothers, Citigroup and the consultancy Lombard Street Research.

Matthew is the author of Superinvestors: Lessons from the greatest investors in history, published by Harriman House, which has been translated into several languages. His second book, Investing Explained: The Accessible Guide to Building an Investment Portfolio, is published by Kogan Page.

As senior writer, he writes the shares and politics & economics pages, as well as weekly Blowing It and Great Frauds in History columns He also writes a fortnightly reviews page and trading tips, as well as regular cover stories and multi-page investment focus features.

Follow Matthew on Twitter: @DrMatthewPartri