17. IMPACT OF GLOBAL ECONOMIC DOWNTURN ON REMITTANCES FROM THE EU
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These figures should, however, be treated with caution, because this simple model with only one explaining variable and a low number of observations affects the accuracy of the results.
Relative Vulnerability of Destination Regions to the Decline in EU Remittances The decline in EU remittances is not likely to affect all destination countries or regions equally. Vulnerability to a decline in EU remittances depends on (1) the share of EU flows for total remittances received and (2) the share of EU remittances for other sources of income at destination. In addition, the relative contribution of individual member states to EU remittance aggregates is likely to differ from one corridor to another, which can be relevant should member states’ remittance outflows fluctuate unevenly in size and in time. Table 17.3 reveals divergences in employment prospects (European Commission 2010) for the main member states contributing to remittance flows, ranging from −4.7 percent (Greece) to +0.9 percent (Austria) in 2010, from −0.8 percent (Ireland) to +2.9 percent (Greece) in 2011, and from −0.3 percent (Portugal) to +1.9 percent (Greece). Insofar as employment growth is assumed to explain main short-term adjustments in EU remittances, these divergences should lead to different trends in remittance flows from each member state. The table highlights relatively higher vulnerability of Albania to a decline in remittances from Greece, Ukraine to remittances from the Czech Republic, and Romania to remittances from Italy (table 17.4).
TABLE 17.3 Selected Member States’ Employment Forecasts, 2009–12 annual percentage change Country
2009
2010
2011
2012
Austria
−0.9
0.9
0.7
0.7
Czech Republic
−1.1
−0.5
0.2
0.3
France
−1.2
0.0
0.5
0.7
0.0
0.3
0.7
0.4
−9.9
−4.7
2.9
1.9
Germany Greece Ireland
−8.2
−4.0
−0.8
0.6
Italy
−1.7
−0.5
0.1
0.4
Netherlands
−1.1
−1.1
0.2
0.3
Portugal
−2.6
−0.9
−0.7
−0.3
Spain
−6.6
−2.5
−0.2
1.1
EU-27
−1.8
-0.6
0.3
0.6
Source: European Commission.