Social and security risks from Syria need to be monitored, Citi says

The Syrian crisis risks creating tensions in Europe which need to be monitored, analysts at Citi said.

“The refugee crisis represents a humanitarian, political, social and economic challenge for Europe,” the broker said in a research note sent to clients.

Citi estimated Europe would receive 3.7m asylum applications in 2015 and 2016, with risks to the upside.

“The key risks to watch are political — the refugee crisis has boosted Europe’s right-wing populists.

“They may perform well at regional elections in France and Germany this winter and at the key 2017 elections. We will closely monitor the risk of tensions in Europe and revived military intervention in Syria.”

Against that backdrop, they highlighted the need to also monitor the risk of revived military intervention in the Middle Eastern country.

In economic terms, the fiscal impact and that on labour markets was expected to be “small”.

At the European Union-level it would result in extra fiscal spending of €6bn in 2015 and another €23bn in 2016, while boosting the Eurozone’s labour force by 900,000 people by the end of 2017.