The migrant crisis affecting Europe is an “opportunity” to stimulate the continent’s economy, according to European Central Bank president Mario Draghi.
Speaking at the World Economic Forum in Davos, Switzerland, the day after the bank left its base interest rate unchanged at -0.3%, Draghi said that he believed the refugee crisis could spur governments in Europe to spend, and in turn, stimulate growth.
“One driver of the economy, which still hasn’t deployed its effect, is the probable increasing government expenditure to cope with the refugees,” Draghi said. “For Europe, the refugees are a challenge and an opportunity. Our society will change, in which direction one can only guess. The government expenditure needed to cope with this challenge could be a large stimulus to growth.”
So far the economic focus on the migrant crisis has largely been on how much allowing refugees to remain in Europe will cost governments across the continent, but Draghi decided to the focus on the positive opportunity the crisis could create, telling Lionel Barber, the editor of the Financial Times that it may help alter demographics within Europe, and stimulate growth.
However, he admitted that he does not know how long it will take to “change this challenge into an opportunity.”
Draghi also used his time on stage to praise the US Federal Reserve’s recent rate hike saying that Janet Yellen’s decision was “patently communicated and flawlessly executed” — and to comment on the Greek debt situation, saying that the “Greek government has made much progress in undertaking reforms and fiscal consolidation.”
You can watch all of Draghi’s comments on the World Economic Forum’s website.