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Icelandic Bank Welcomes Refugees

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Icelandic Bank Welcomes Refugees

Photo: Geir Ólafsson.

The analysis department at Arion Bank has released a report saying that welcoming a large number of refugees to Iceland would be a very extensive and expensive project, but that the long-term economic effect would be a positive one—adding that there is little to suggest that the move would cause wages to drop either.

Arion Bank released its report yesterday, which provides an unusual economic view of what is usually solely a political and social debate.

The bank believes the project will be complicated and expensive in the short term and will require close cooperation between many unrelated individuals, institutions and organizations not usually used to working together. Despite this, research suggests that the longer-term economic impacts refugees bring with them are positive.

Among other sources, the bank draws on World Bank figures which suggest that a three percent increase in migration from developing countries results in a 0.3 percent increase in household incomes in the developed countries they move to.

The report highlights that one of the greatest challenges faced is that the arrival of refugees would increase pressure on the housing market, which is already stretched. New building projects are, however, good for the economy.

Arion Bank reiterated conclusions of a previous report it released, stating that there will likely be a labor shortage in Iceland in the coming years and decades if the country hopes to maintain economic growth.

Developments are similar across Europe and the German consultant Rainer Strack predicts that the continent will be facing a full-on labor crisis by 2030 if it intends to maintain growth, and that foreign workers will be essential, RÚV reports.

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