Remittances from Europe to MPCs

Some 7.1 billion euros are “officially” transferred each year from Europe to eight Mediterranean countries (between 12 and 14 billion including “informal” transfers). These remittances far exceed total flows of net foreign direct investment (USD 6.4 bil­lion a year, 2000-2003) and official development assistance (USD 4.3 billion a year, 2000-2003) received by these countries, according to the summary of a study by the FEMIP Trust Fund.

Remittances are therefore of considerable economic importance for the Mediterranean Partner Countries, the principal official channel for remittances is often money trans­fer companies despite them being expensive, while the funds are intended primarily for consumption purposes. They are used to improve education, health and housing conditions and only a frac­tion is channelled directly into pro­ductive investment.

The study underlines the magnitude of the volume of funds transferred, examines the obstacles hampering remittances and proposes courses of action aimed at maximising their impact on the financing of the economies of the Mediterranean partner countries.

FEMIP, the European Investment Bank’s dedicated facility for the Mediterranean, has produced a summary sheet of the in-depth analysis of financial flows from Mediterranean migrants working in Europe.