In an excellent piece on why Britain ought to accept more refugees, Jonathan Portes writes:
As Philippe Legrain from LSE’s European Institute points out in his forthcoming paper on this topic, welcoming refugees is not only a humanitarian and legal obligation: it is an investment that can yield substantial economic dividends.
Philippe Legrain, senior visiting fellow at the London School of Economics’ European Institute, said: “Welcoming refugees is an investment that can pay dividends as soon as they start working. With demand [in the eurozone economy] depressed, additional spending on refugees acts like a small fiscal stimulus. Looking forward, refugees boost the labour supply, and hence growth.”
Read the full article here
One consequence of the Paris attacks is that Britain’s renegotiation of its EU membership has been delayed. With the risks of Brexit rising by the day, David Cameron’s priority should be to complete the renegotiation as quickly as possible, declare victory, and start campaigning vigorously on the broader reasons why Britain should stay in the EU. My column for Project Syndicate
The horrific Paris attacks are shocking and deeply saddening. And when people’s security is threatened, governments sometimes need to curtail our freedom. But the measures taken ought to be targeted, proportionate and effective. Reimposing border controls (which would not have prevented the Paris attacks) and turning away refugees, many of whom are fleeing Islamic State violence, are none of those things. That is what I argue in my latest column for Foreign Policy.
China is a rising economic power, the European Union a declining one. So Britain’s future is best served by hitching its wagon to Beijing rather than to Brussels. As last week’s high-profile visit by Chinese President Xi Jinping shows, Britain can prosper as a global trading power outside the EU.
Not so fast. The EU accounted for 44.5% of the UK’s exports in 2013, China for a mere 3.4%. Whereas half of foreign direct investment in Britain comes from the rest of the EU, Chinese FDI is still tiny. So Britain’s economic relationship with China is not going to be a substitute for its ties with the EU any time soon. Nor should it ever be: because the two are in fact complementary. The much-heralded new “golden decade” for relations between Britain and China highlights how EU membership is not an impediment to doing business globally. On the contrary: Britain’s membership of the EU is part of its appeal to China, as President Xi himself emphasised. So Britain doesn’t need to choose between being European or global: it can – and should – be both.
My latest for CapX
This brings me to a wider point about political integration, as raised by economist and author Philippe Legrain: that the last thing the EU needs is ever-closer union. What makes this anti-integration argument so intriguing is that its proponent is pro-European.
Mr Legrain’s argument is that the political integration on offer is of the wrong kind, and thus deserves to be rejected. It is not the Keynesian fiscal union, preferred in France in particular, but the German variety. When the Germans talk about fiscal union, they mean rule enforcement, not macroeconomic stabilisation, eurobonds, deposit insurance or fiscal backstops. I would agree with his overall conclusion — that if this is the kind of integration on offer, it is better simply to say no and stick with the present system.
A good example of why the present system may be preferable to a bad fiscal union is Italy’s 2016 budget. It includes a much higher deficit than would have been the case under a rigid enforcement of the various fiscal rules because the European Commission interprets the rules more flexibly than before. This flexibility allows Italy to accompany its relative weak economic recovery with moderate fiscal expansion, which seems more or less appropriate. Under a German-style fiscal union regime, it would not have been able to do so.
The debate about the future of Europe and the eurozone thus forks out in more than two directions. It is not just about pro or anti, leave or stay, but about the kind and degree of integration we want. There is a multitude of options — and for now no minimalist consensus behind any of them.
Read his FT piece here