Nov 23, 2018
Welcome to Finance & Fury’s Furious Fridays… This week we
continue looking at the EU.
If you didn’t catch last week’s episode, you might want to check
it out
here. It explains what the EU is, and what their role in Europe
actually looks like.
This week we dive a little deeper and look at the two issues
faced by the countries who are considering leaving the EU - Loss of
sovereignty & Immigration.
Loss of sovereignty
A lot of nations (Hungary, Czech Republic, Slovakia, Poland)
lived under brutal authoritarian governments – for most of the
20th
- They swapped Nazi rule, for Soviet rule and now the EU
rule
- The Internet Censorship Bill is a great example of loss of
sovereignty
- Article 13 – the new Copyright Directive involves the creation
of a crowdsourced database of "copyrighted works". Platforms such
as FB, Youtube etc must take this into account and block
“copyrighted works” from being posted on their sites.
- Billions of people around the world will be able to
submit anythingto the blacklists
- There is no onus to prove you actually hold the copyright, and
no punishment for false submissions
- Article 11 simply gives publishers the right to ask for paid
licenses when their news stories are shared on online platforms.
This would destroy FB and Youtube. Good or not – this is where a
lot of people get their information, updates about current events
and news. It’s all shared content.
- The thing that was the turning point for most was realising how
little Sovereignty they have when considering the current
immigration crisis
- There are two complicated issues – The Schengen Agreement and
The Dublin Regulations
- These will probably cause the downfall of the EU
- Schengen Agreement- border checks on internal borders (i.e.
between member states) are abolished
- Restricted border checks to external borders only – Meaning
free travel for anyone inside the EU
- Some nations aren’t a part of it – UK still has customs, even
on the train between France and the UK
- Almost the same as moving from QLD to NSW to Vic
- The Dublin Regulation- the EU member country that an immigrant
first reaches MUST process the asylum application
- Prevents asylum applicants in the EU from "asylum shopping" –
moving to the country of their choice, typically the country that
will provide better welfare.
- This wasn’t well enforced until 2016, but now it’s placing too
much responsibility on the member states on the EU's external
borders – Italy, Greece and Hungary – who receive the most
immigrants on their doorsteps.
- Italy – boats from Africa,
- Hungary and Greece – Turkey
- Spain – from Morocco
The new proposal would introduce a "centralized automated
system" to record the number of asylum applications across the EU
and presents a "reference key" based on a Member State's GDP and
population size.
- The country is essentially given a quota of how many migrants
they have to accept.
- The populations of the country have no say on immigration
policies
- If a Member State chooses not to accept the asylum seekers – it
will have to contribute $250,000 per application as a "solidarity
contribution".
- This got me thinking – that is a LOT of money per person –
especially given the narrative that there is massive “economic
benefit” in migration
So, what are the economic effects of migration?
There are two sides to the coin, and it all depends on who is
moving where.
Immigration – the words is now used as a collective term for
both legal and illegal migrants entering a country, including
refugees.
The “Sending” countries experience both good and bad
effects off emigration.
- “Brain Drain” - the loss of trained and educated individuals to
emigration – This is generally through legal immigration.
- Currently more African scientists and engineers working in the
U.S. than there are in all of Africa, according to the
International Organization for Migration (IOM).
- Africa only retains 1.3% of the world’s health care
practitioners – UN Population Fund 2006
- With almost 17% of the world’s population and 64% of the
population with HIV/AIDs
- Remittances - funds that emigrants earn abroad and send back to
their home countries
- Estimates at $530bn in 2012
- Money leaving the shores of a country reducing the multiplier
effect in the nation the money is being sent from because it’s not
money that will be spent in that nation.
- Might have small currency pressures, and also props up the
sending country with higher spending
The “Receiving” countries
- Population growth is heightened – More people buying things,
and paying taxes (that is, for the portion of immigrants who are
working)
- This helps to address skills shortages but may also decrease
domestic wages
- This can also add to public burden (though this is negligible
for skilled migration)
- There are a lot of hidden costs of immigration; Welfare,
Education, Healthcare, Infrastructure, Housing
- Increases unrest and economic inequality
- CIS study concluded that, “immigration has dramatically
increased the size of the nation’s low-income population”
- Disparities between immigrants in Germany and native Germans;
49% of non-Germans falling below the poverty line compared to 23%
of original native citizens.
- This is due to immigrants being less likely to be employed –
81% for natives to 66% of non-Germans.
- “The consequences are segregation, housing problems and divided
cities” (Traynor, 2010)
- Who does this benefit?
- Migrant workers often fill low-wage jobs as supply of labour
(e.g. agricultural and service sectors).
- Helps to lower costs for big companies and increase supply of
labour at a greater rate than demand for labour …which of course
means lower wage growth.
- For example: Why do celebs want to open borders in the US? Who
else will clean their 12-bedroom mansions (ironically, they don’t
let refugees stay with them) inside giant walls of their own.
- Economic effects – Doesn’t tell a good story
- Netherlands: Each Muslim migrant costs $1,150,000 in total over
their lifetime
- Germany: Total migrant cost was $86bn over 4 years. This
equates to 12 Germans needing to work to pay taxes for 1
migrant
- Italy: Spent $4.2bn on migrants in 2017 (about one seventh of
Italy’s budget)
- UK: $120bn pounds over 17 years
- Sweden: $18.6bn in costs for migrants in 2017 (19% of their
Government budget, and 3.2% of GDP)
- 60k Euro is spent per migrant per year, whilst the average
Swedish household income is only 29k Euro. Let that sink in.
The real world effects
- It comes back to legal immigration vs illegal/refugee intake.
There is a massive distinction.
- In 2015 the EU had 1.8m illegal immigrants in the one year
- Accepting a massive number of refugees compared to rest of
world
- US: 38k refugees per annum
- Australia: 18k refugees per annum
- Italy: 150k refugees per annum
- Sweden: 160k refugees per annum (2% of their population)
- You hear in the media it is a “refugee crisis” but in reality,
it is economic migration. A recent report showed that the reality
is only 1 in 5 are coming from a ‘war zone’.
- Estimates at over 8m people have migrated to the EU in the past
6 years, with a staggering 75% being young men – not woman and
children like you see in the media.
- System was broken – 65% of child refugees were actually found
out to be adults. This number is even worse in Sweden at 85%.
- This really hurts the sending countries – there’s now slavery
again in Libya through human trafficking.
- 78% of EU citizens want tighter control over borders and
immigration.
Beyond economics – the current state of the EU
Remember, these are the statistics; simply reality and the
facts.
- The UK leaving the EU because the people feel the damage is
already done
- Most common boys name is now Mohammed (or one of its
variants)
- In London the white British people are a minority, Savile Town
has 1% white: 48 out of 4,050
- Unfortunately, it has created a clash of cultures
- The UK is the acid attack capital of the world – there were 77
in 2012, and 465 in 2017
- Grooming gangs with underage girls (Oxford, Rotherham,
Rochdale, Newcastle, the list goes on) has been going on for over
10 years. Not going to go into details but look it up, but be
warned if you start to research this yourself. It’s horrific.
- Sweden
- In 2015 Sweden took in almost 180k refugees (2% of their
population)
- This caused unrest (putting it lightly)
- Arson attacks – 100 cars were burned in a coordinated attack a
few months ago
- Back in 2016 – 40 hand grenade attacks – more recently on cop
stations as well
- “No go” zones (this has been rebranded to “Vulnerable Areas”)
- There were 61 ‘no go zones’ in 2017 – 23 were ‘especially
vulnerable’
- This is just rebranding. Whilst it’s technically true that you
can still go to these places you might end up like the reporters
who have gone there. Not. Good.
- Sanandaji
- Has been a sharp increase in welfare payments, 60 percent of
which go to immigrants
- Sweden expects to spend about 7 percent of its $100 billion
budget next year on refugees – double what was spent in 2015
- Only 25 percent of Somali refugees (age 25–64) were employed in
the formal economy in 2010
This brings us back to the EU motto from last Furious
Friday episode; “United in Diversity”…but how well is that
working?
There is a massive difference between Racial and Cultural
diversity.
- Race means nothing, everyone should be treated the same
- Culture is the cohesion that keeps a country together and the
ability to communicate and cooperate, with everyone playing by the
same rules, building towards the same thing, is what keeps a
country together.
- It’s like building a house – What happens if the carpenter,
tiler, builder, architect all have their own ideas about what it
should look like? What if they don’t pay attention to the plans and
try to make it how they want it? The EU population is annoyed as
their figurative houses are falling down. And, they have little say
when it comes to this.
- There is a difference between legal and illegal immigration,
and refugee/asylum migration.
- One has been selected to come in and one hasn’t. It’s hard to
conceptualise at the global level.
- But here’s a question: do you lock your doors? Or have a fence
around your place? Why?
- To protect yourself, family or stuff from other
people/strangers.
- A Government has one role – look after the interest of its
citizens. Almost all the time that is achieved through good
relationships between countries and peace.
- Immigration policy is the same thing as locking your doors at
night, or conversely, leaving them open for anyone to come in.
History of migration
- Nations were built on immigrants? Very true – key word her is
‘were’. Migration has changed.
- In the old days it was in reverse – People from Italy, Ireland,
Greece, England were moving to places that were harder to live in
than their homelands - were going to make something for themselves.
- Flow of migration was from richest parts of the world to the
poorest
- Where would you have rather lived – London or Australia – in
1788?
- Compared to today, both options don’t look great. But back then
London was one of the better places to live in the world.
- Things were hard: for example, almost half of the original
colonists in the US starved in the first few years. But thanks to
socialist policies once they were given property rights things took
off.
- Today the opposite is occurring.
- Major net migration has reversed over the past 200 years. I am
all for immigration, but not if it hurts the local population or if
it hurts the immigrants (think people smuggling, slavery, human
trafficking, and the dangers of actually getting themselves to the
new country).
- Imagine that you move to Syria, Afghanistan, Iraq. How hard
would it be to integrate? Language, culture, etc.
- Naturally most would isolate themselves and want things to be
like home. I wouldn’t dare move to another country and try and make
it like Australia – what is the point then of moving?
- Anyone who wants to have a Socialist government can move to
Venezuela – the UN released a report showing 3m people have left
their due to their socialist economy.
In Summary – We’re looking at Death by Demographics
- Bringing these facts to bear – Not only is this restricting
economic growth of the EU, it is costing more through
migration
- We’re finishing up this topic next Friday by looking at the
flow on effects of the EU breaking up; on the Share Markets, Bond
markets and on economic growth.
As always, if you have a question or topic you’d like to know
more about, contact us at www.financeandfury.com.au/contact
Here are some links to some of the information we’ve
been looking at:
http://www.opennetwork.net/wp-content/uploads/2016/05/Tent-Open-Refugees-Work_V13.pdf
http://migrationcouncil.org.au/wp-content/uploads/2016/06/2015_EIOM.pdf
https://foreignpolicy.com/2016/02/10/the-death-of-the-most-generous-nation-on-earth-sweden-syria-refugee-europe/
http://bruegel.org/2017/01/the-economic-effects-of-migration/