Migration, Taxation and Welfare at the Time of the European Migrant Crisis

The severity of the economic crisis and the humanitarian emergency situation, caused by the abnormal wave of migrants and asylum seekers from the Middle East and the African continent, have put the governments of the EU countries and their taxation and welfare systems in front of a set of challenges requiring a courageous, coordinated and unified response. European welfare systems face already serious financial difficulties because of the high (and persistent) levels of unemployment, partly caused by the social security systems, and the demographic ageing. The global economic crisis and the recent humanitarian emergency are forcing they to address additional challenges, as those of sustainability and resilience of the aforementioned systems. Moreover, international competition and economic integration put pressure on social policy in the EU member states, and creates competition among national tax and welfare systems. In this way, nowadays, because of tax abuses and the spread of austerity measures, all countries – not only the resource-rich countries but poor in income (that is, with low or middle income) – are suffering from a kind of “resource curse”, which does not allow them to fight effectively inequality and poverty. These phenomena incur the risk of dismantling the welfare state. Nevertheless, the European political debate has focused on the allocation of the economic burden produced by this emergency situation, rather than on the crucial issues of its possible economic and social impact and the adequate solutions to improve the sustainability and resilience of their tax-benefit systems in a decisive moment in which inequalities are rising and new forms of poverty are emerging. The report aims to address these issues from an economic point of view, focusing in particular on: a) the characteristics of the European welfare systems and the economic effects produced by them; b) the Italian national social security system, the range of social security benefits (including the relative eligibility rules) and their capacity to address the challenges presented by immigration; c) the immigration policies adopted in the EU and in Italy; d) the proposals put forward so far in the European debate to enable the national tax and welfare systems to adequately address the demographic, social and economic challenges of the XXI century.