Every year, about 70 billion euros earned by foreigners in European Union countries end up in the home countries of labor migrants.
To assess international and intra-European flows of funds earned by labor migrants, the European Union uses two indicators: the so-called remittance and payments to foreign employees. Remittance (Italian, transferred, handed over) serves to determine the cash flows that labor migrants with permanent jobs in a foreign country send home. According to statistics, about two-thirds of the funds sent home go outside the European Union.
Over the past three years, the most money sent home came from Spain, Italy, France, and Germany, which accounted for about 65% of European remittances. Spain is the absolute leader in transferring money outside the European Union, primarily to Latin American countries, where up to 5 billion euros are sent annually.
Italian money primarily goes to Romania (1.5 billion euros) and China (1.5 billion euros), while French money goes to Portugal (1 billion euros) and Morocco (0.7 billion euros). Labor migrants with permanent jobs in Germany send the most money to Turkey (1 billion euros) and Greece (0.5 billion euros). The highest concentration of guest workers from CIS countries is observed in the Czech Republic, from where Ukrainian migrants annually send over 200 million euros.
Along with the influx of foreign labor, the scale of labor emigration of the local population to richer countries is growing in Southern Europe. For example, Spaniards emigrate en masse to the UK, USA, and Switzerland, from where, having found permanent jobs, they annually send home up to 5 billion euros. In Eastern European countries, most of the money earned in emigration goes to Romanian and Polish accounts (3 billion euros each).
Interestingly, without these transfers, the balance of payments deficit of Romania and Poland would have grown by more than half. In per capita terms, the leader in the inflow of foreign funds is Lithuania, whose citizens annually transfer an average of 800 million euros to relatives.
Payments to foreign employees, which are another indicator for assessing 'money migration', mean money for the remuneration of foreigners who permanently reside in their home country. In addition, this indicator covers seasonal workers, employees of embassies and European institutions. Payments to foreign employees, unlike remittances, mainly reflect intra-European cash flows.
The leaders in paying salaries to foreigners are Germany and Luxembourg, transferring to the accounts of foreign employees 8 and 7.5 billion euros respectively. German money is primarily received by seasonal workers from Poland (2.7 billion euros) and Romania (1 billion euros), while Luxembourg salaries are shared among citizens of France (3.3 billion euros), Belgium (2 billion euros), and Germany (1.6 billion euros), who, living in their home countries, formally work for Luxembourg companies. Note that due to softer tax legislation, more and more Europeans register businesses in Luxembourg, which is often called the financial heart of Europe.
Belgium (2.6 billion euros), the Netherlands and Denmark (2 billion euros each) can be called generous towards foreign employees. The Czech Republic is the only EU country where a significant share of paid funds goes outside the EU. Out of 1.2 billion Czech payments, more than half goes to salaries of Ukrainian employees, and the rest to neighboring Slovakia.
Dmitry Kulik.
Russkaya Germaniya