Financial Implications of the New Pact on Migration and Asylum: Will the Next MFF Cover the Costs?
On 23 September 2020 – at the time of what seemed (but turned out not) to be the photo finish of the negotiations of the 2021-2027 Multiannual Financial Framework (MFF) – the European Commission proposed the New Pact on Migration and Asylum (Migration Pact) with the appended package of new legislative proposals. The aim of this blog post is to look at the financial implications of the Migration Pact and to examine whether the ambitions of the new Pact are reflected in the 2021-2027 MFF. The text will try to respond to two questions. Firstly, it will examine whether the Migration Pact generates new costs for the EU and its Member States and whether these costs have been calculated into the MFF. Secondly, it will consider whether the creation of additional costs by the Migration Pact could interfere with its successful adoption and implementation.
The timing of the Commission’s proposal of the Pact coincided with the final phase of extremely difficult negotiations on the adoption of the next MFF for the period 2021-2027. The agreement among Member States on the next seven-year budget ended at the longest ever meeting of the European Council on 21 July 2020. According to the European Council Conclusions, EU leaders agreed that the next MFF would amount to € 1,074.3 billion with an additional € 750 billion for the Recovery Fund (all the amounts in the text are provided in 2018 prices). Out of that amount, the conclusions allot a total of € 22.7 billion to Heading 4 titled ‘Migration and Border Management’. Out of this amount, € 8.7 billion has been dedicated to the Asylum and Migration Fund (AMF), € 5.5 billion to the Integrated Border Management Fund (IBMF) and € 5.1 billion to the reinforced European Border and Coast Guard Agency (EBCGA).
In addition, the external dimension of migration will be an important component of the Neighbourhood, Development and International Cooperation Instrument (NDICI), whose financial envelope would amount to € 70.8 billion, as specified in the Conclusions. In the political agreement between the European Parliament and EU Member States on 10 November 2020, it was confirmed that the total MFF would amount to € 1,074.3 billion with the additional € 750 billion for the Recovery Fund. When compared to the European Council conclusions from 21 July 2020, ten programmes received top-ups. Among them are also the funds important for the financing of EU migration and asylum policies. First, the IBMF received an additional € 1 billion and now amounts to €6.5 billion. Second, the EBCGA received an additional €0.5 billion and now amounts to €5.6 billion. Finally, NDICI received an additional €1 billion and is thus allocated €71.8 billion.
On 16 December 2020, the European Parliament gave its consent to the regulation on the 2021-2027 MFF, which was then unanimously adopted by the Council and came into force on 1 January 2021. As opposed to the settled future of the 2021-2027 MFF, the future of the Pact is far less certain. It is questionable whether the legislative proposals put forward by the Commission will ever be adopted and, if so, what their final versions will look like. As will be shown later in the text, precisely its financial implications are among the reasons behind the uncertain prospects of the new Pact, as they could impact both on the negotiations preceding its adoption and on its successful implementation.
*COMMITMENTS, in 2018 prices
2. Background: EU Migration and Asylum Policies in the Multiannual Financial Frameworks
Generally, the asylum, migration and border control budget had traditionally taken a rather small percentage of the EU budget (e.g. 1.4% in 2016) and it has grown rather slowly over the budgetary periods. This was partially due to the intergovernmental nature of these policies until the Treaty of Amsterdam and partly to their sensitivity, which has prompted Member States to prefer retaining control of the resources allocated to these policy areas.
A more ambitious asylum and migration budget has been agreed with the 2021-2027 MFF. The previous experience of insufficient funding during the 2015/16 refugee crisis, which led to the reshuffling of funds and significant use of contingency margins and flexibility instruments, was one of the factors to have spurred these developments. However, three points need to be made here.
First, the emphasis of the new MFF is on the fight against irregular migration and smuggling, and border-control capacity building. Consequently, the proposal suggests a significant increase in allocations to the external dimension of migration and asylum management and a comparably smaller raise for their internal dimension. The fact that the budget for these policies is undergoing the highest increase in relative terms supports the argument that it is politically easier to negotiate a budgetary increase in this politically sensitive area than to reach an EU-wide agreement on a change of EU migration and asylum legislation, such as the one proposed by the Pact.
Second, the amount of € 22.7 billion, which has been agreed for migration and border management in the 2021-2017 MFF, represents a significant increase in comparison to the 2014-2020 € 10 billion budget spent on migration and asylum. However, at the same time it also amounts to a 26% decrease in comparison to the € 31 billion proposed by the Commission for the new budgetary period.
Finally, whereas the EU budget plays only a complementary role and is not intended to replace national expenditures in the areas of migration and asylum, the fact remains that the general EU budget – including funds for migration and asylum – remains too modest to cover the actual needs. Only a more radical reshaping of EU resources would enable the EU budget to cover the costs more substantially than it does today. Despite these difficulties associated to the MFF in general, the new EU migration and asylum budget is a step in the right direction, as it aims to respond to some of the most pressing challenges in the area of migration and asylum.
3. Financial Implications of the Pact
This blog post will focus on three legislative proposals contained in the Pact (for an overview and analysis of the main points of the Pact, see Daniel Thym’s post here and for an insightful critique of its wasted potentials, see Philippe de Bruycker’s post here): the Proposal for a Regulation introducing screening of third-country nationals at the external borders (Screening Proposal), the Amended proposal for a Regulation establishing a common procedure for international protection in the Union and repealing Directive 2013/32/EU (Amended Asylum Procedures Proposal) and the Proposal for a Regulation on asylum and migration management (Management Proposal).
Based on the explanatory memoranda of all the Commission’s legislative proposals contained in the Pact, all expenses resulting from the Pact “can be covered by the resources available to the Member States under the new MFF”. Consequently, no additional financial or human resources are requested based on the wording of the legislative proposals. However – as will be shown in the proceeding analysis – this neither means that the EU budget is intended to cover all the costs Member States will have based on the Proposals, nor that it will actually be able to do so, for four reasons. First, a number of EU projects not only in the area of migration and asylum, but also in other EU policy areas, such as environmental law, social policy or data protection, have to be borne, at least partly, by Member States. Second, the usual co-financing rate for the AMF and the BMVI is 75% of the total eligible expenditure of the activity, meaning that Member States have to cover 25% of the costs from their own resources. Thirdly, only 40% of the AMF and of the BMVI budget (called ‘thematic facility) is flexible – meaning that it can be used for tasks not initially planned – whereas the remaining 60% is allocated to Member States’ predetermined national programmes. Finally, financial implications of the Migration Pact could neither be taken into consideration in the Commission’s proposal of the next MFF, which was drafted much before the Migration Pact, nor were they considered in the Member States’ negotiations on the 2021-2027 MFF and it remains to be seen whether the resources contained in the thematic facility – meaning the flexible part of the AMF and BMVI – will suffice to cover the Member States’ needs.
This section will be divided into three sub-sections. It will, first, discuss financial implications of screening procedures, then of border procedures and, finally, of relocations. Each sub-section will first briefly outline the main elements of each of the three procedures, which is necessary in order to understand their financial implications.
3.1 Financial Implications of Screening Procedures
The aim of screening procedures – as regulated by the Screening Proposal – is to strengthen the control of persons entering the Schengen area and refer them to the appropriate procedure. During the procedure, third-country nationals are not allowed to enter the territory of the Member State unless it becomes apparent, during the screening, that they meet the entry conditions as required by the Schengen Borders Code. According to the Screening Proposal, screening applies to all third-country nationals who have crossed the external border in an unauthorised manner, to those who have applied for international protection during border checks without fulfilling entry conditions, as well as to those disembarked after a search and rescue operation.
Point 4 of the Explanatory Memorandum of the Screening Proposal estimates that the financial resources necessary for its implementation is € 417 626 million for the period 2021-2027. It further provides that the Proposal “has implications for the EU budget” and continues that “the following elements of the screening will potentially require financial support: infrastructure for the screening; creation and use/upgrade of the existing premises at the Border Crossing Points and reception centres; access to the relevant databases at new locations; hiring of additional staff to carry out the screening; training of border guards and other staff to carry out the screening; recruitment of medical staff; medical equipment and premises for the preliminary health checks, where appropriate; and setting up the independent monitoring mechanism of fundamental rights during the screening.” However, point 4 further provides that “the expenses related to these new tasks can be covered by the resources available to the Member States under the new MFF” and that “no additional financial or human resources are requested” from the EU budget.
This opens up the question to what degree the tasks stipulated by the Screening Proposal can be covered by the new MFF. As explained previously, the costs of any new tasks envisaged by the Proposal could not be included in the Commission’s proposal of the next MFF, as it was drafted in 2018, much before the Screening Proposal was put forward. These costs were also not subject to negotiations on the MFF among the Member States and between the Council and the European Parliament. For this reason, any new costs resulting from the Screening Proposal could not have been calculated into the costs covered by the MFF. However, a number of tasks proposed by the Screening Proposal are actually not new, so their costs are not new (for a detailed analysis of screening procedures, see the post by Lyra Jakulevičienė here). Identity, registration and security checks, as well as preliminary vulnerability assessments – as the mandatory elements of the screening exercise – are already part of Member States’ obligations based on the Schengen Borders Code and the Eurodac Regulation. On the other hand, even though health checks have not been prescribed by EU migration and asylum law so far, Member States have, in practice, started conducting them in response to the COVID-19 pandemic. However, in case of the adoption of the Screening Proposal, health checks will become one of the Member States’ obligations stemming from EU law and applicable also in pandemic-free times. Nevertheless, it is questionable to what degree Member States will be able to gain EU funding for the costs of health checks, which will encompass the recruitment of medical staff, the purchase of medical equipment and ensuring adequate premises.
Additionally, the screening procedure will result in a debriefing form containing the information as to whether the person should be directed to the asylum, border or return procedure. This is likely to require the hiring of extra staff and their training, which will create new costs for Member States. Further, the Screening Proposal envisages the establishment of an independent monitoring mechanism. This will also create additional costs, which have not been envisaged by the MFF, as such a mechanism will require the presence of lawyers, NGOs and other staff/bodies at the external borders and their likely further engagement in the form or writing reports and recommendations. Also, Art. 6(1) of the Screening Proposal envisages that the screening takes place “at locations situated at or in proximity to the external borders”. In many Member States this is likely to require the adjustment and upgrading of border infrastructure, as well as enabling access to relevant databases at the external borders. Finally, since all these activities are going to take place at the borders, without authorizing third-country nationals to enter the territory of a Member State and preventing their absconding, Member States will have to create sizable facilities where third-country nationals will be accommodated during the screening and border procedures.
Consequently, even though a number of tasks envisaged by the Screening Proposal will not be new, one can expect a considerable increase of Member States’ costs related to the activities, personnel and the infrastructure needed at the external borders. It is questionable how much of these new costs will, in the end, be covered from the EU budget and how much will fall on national budgets, primarily of frontline Member States. Namely, the relevant EU funding instrument for the tasks encompassed by the Screening Proposal – as well as for other activities related to border management – is the BMVI, which is part of IBMF. Based on the 2018 IBMF Proposal, in the 2021-2027 budgetary period 60% of the IBMF will be allocated to the Member States’ predetermined national programmes, whereas the remaining 40% of the total IBMF envelope will be allocated to the thematic facility, which enables flexibility by allowing the disbursement of IBMF funds for Member States’ specific actions, Union actions and emergency assistance, all based on the initiative of the Commission. Consequently, 40% of IBMF is flexible, meaning that it could be used to finance the activities which have not been initially planned. However, it is difficult to predict which initially unanticipated activities will in the end be covered from the thematic facility, especially in case Member States’ demands for the flexible part of the IBMF envelope exceed the available resources.
Additionally, even in cases in which the Commission decides to financially support new costs resulting from the implementation of the Screening Proposal, the contribution from the EU budget will not cover the total expenditure of the task (see Art. 11 of the IBMF Proposal). In most cases, the Union co-financing rate will not exceed 75% of the total expenditure of a project. In exceptional cases, the Union contribution can be increased to 90% for actions listed in Annex IV of the IBMF Proposal and for specific actions of high EU added value, which are defined by the Commission in its work programmes. Full 100% funding may be granted for operating support and emergency assistance. Consequently, with the adoption of the Screening Proposal, Member States – primarily frontline ones – will face a number of financial uncertainties associated to its implementation. They will certainly have additional implementation costs and it is questionable to what degree and at which co-financing rates these costs will be covered from the EU budget.
3.2 Financial Implications of Border Procedures
Once the screening procedure is over, third-country nationals are channelled into asylum, or return procedures (for an analysis of border procedures, see the posts by Jens Vedsted-Hansen here and by Francesco Maiani here). Border procedures, which are stipulated by the Amended Asylum Procedures Directive, bring a fundamental procedural change to EU asylum law. The aim of a border procedure is “to quickly assess at the external borders whether applications are unfounded or inadmissible and to swiftly return those with no right to stay”, thus enabling Member States “to require applicants for international protection to stay at the external border or in a transit zone in order to assess the admissibility of applications“. Consequently, border procedures are conceptualised as a novel, pre-entry step, whereby asylum applications would be assessed without authorising the applicants’ entry into the Member State’s territory and, in case of a negative decision, a return border procedure would follow immediately.
Even though border procedures do not preclude the host Member State from carrying out the ‘Dublin’ procedure for determining which Member State is responsible for examining the asylum application, the intention behind the Amended Asylum Procedures Proposal obviously is to encourage a widespread use of border procedures in frontline Member States. Generally, national authorities are entitled to choose whether to channel the asylum applicant to a border procedure or a regular asylum procedure (unless the asylum applicant belongs to one of the categories where border procedures are compulsory). However, it is likely that, in most cases, they will prefer to keep asylum applicants at the external borders, instead of allowing them to enter the territory.
Generally, any new procedure which sets additional operational and administrative requirements on Member States inevitably generates new financial costs. First, frontline Member States will have to hire and train additional staff in order to comply with the 12-week time limit for the completion of the border procedure, while at the same time respecting applicants’ rights. Second, the facts that border procedures will take place at the external borders and that they will preclude the applicants’ entry into the Member States’ territories has two implications. First, it implies that Member States will usually resort to detention during the 12-week period and, consequently, may have to make significant investments in setting up the adequate infrastructure for that purpose. Additionally, the whole border procedure will – in line with its name – take place at the external borders, thus requiring the setting up of necessary facilities. Even though Member States do not need to set up such facilities at every border crossing point or at every section of the external borders where migrants might be apprehended or disembarked and they can choose the locations anywhere close to the external borders and transfer applicants to these locations, regardless of where the application was initially made, border facilities should be located in such a way “to avoid too many and overly time consuming transfers”. Consequently, the implementation of border procedures will be a highly costly and demanding activity, which will fall on frontline Member States. Insufficient investment in border procedures will result in poor implementation of the Pact and, possibly, serious violations of third-country nationals’ rights. It will also trigger increased discontent of frontline Member States and mutual accusations among Member States and EU institutions for the problems that might arise. Consequently, without sufficient EU financial support, border procedures could do more harm than good.
According to the Explanatory Memorandum of the Amended Asylum Procedures Proposal, Member States will be able to make use of the AMF funds in order to support investments in the infrastructure created for the purpose of border procedures, while the European Asylum Support Office (EASO) and Frontex will be able to support Member States with staff within their respective mandates. However – as in the case of the financial support for screening from BMVI – it remains to be seen whether the AMF will contain sufficient funds for Member States’ needs. Again, as in the case of BMVI, potential EU financial support would come from the thematic facility, which amounts to 40% of the total financial envelope of the AMF and enables flexibility for the actions which have not been initially planned. According to the Explanatory Memorandum, it is expected that the resources contained in the AMF will be sufficient. Only time can tell whether this presumption is accurate. In any case, the Explanatory Memorandum provides that “the Proposal does not impose any financial or administrative burden on the Union” and “has no impact on the Union budget”.
Additionally, the Union co-financing rate from the AMF will in most cases not exceed 75% of the total expenditure of the project. It can, exceptionally, be increased to 90% for actions listed in Annex IV of the AMF Proposal and for specific actions of high Union value. Full 100% funding could be granted for operational support and for emergency assistance. The co-financing rate for Union support to border procedures will depend on the Commission’s decision, so it cannot be predicted at this stage.
3.3 Financial Incentives for Solidarity
Over the past decade, solidarity has been one of the most controversial issues of EU migration and asylum policies. In this context, relocations were one of the main stumbling blocks in finding a solution that would be acceptable to all Member States. The Management Proposal aims to find a compromise among opposed national interests by enabling Member States to choose (to a certain degree) among different solidarity tools when providing help to the most pressured Member States. The Proposal introduces a ‘solidarity pool’ – a set of solidarity contributions benefiting a Member State under migratory pressures or subject to disembarkations following search and rescue operations. Solidarity contributions consist of relocations of asylum seekers who are not subject to border procedures, relocations of beneficiaries of international protection, ‘return sponsorships’ of illegally staying third-country nationals and capacity-building and operational support affecting the benefitting Member State. The share of solidarity contributions by each Member State will be calculated based on the size of the population (50% weighing) and the total GDP (50% weighing). Even though Member States are free to choose solidarity contributions, the Management Proposal provides a correction mechanism in order to prevent a situation where they would mainly or only choose capacity-building and operational support, thus completely avoiding relocations and return sponsorship.
This post will not analyse whether solidarity arrangements set by the Management Proposal respond to the actual needs of the most affected, frontline Member States (for this, see here Francesco Maiani’s post). The aim of the following paragraphs is to examine to what extent relocations – as the most contentious solidarity tool – will be covered from the EU budget and, if so, whether the amounts allocated for relocations will be a sufficient incentive to encourage Member States to choose relocations from the ‘solidarity pool’ set by the Management Proposal.
The Management Proposal foresees that transfer costs for relocations will be paid from the thematic facility of the AMF, mainly through the Commission’s direct management or, depending on the situation, through shared management, i.e. jointly by the Commission and individual Member States, by topping up national programmes. The AMF foresees relocations as one of the possible uses of the thematic facility. However, it does not envisage a special financial envelope which would be allocated exclusively for relocations. For this reason, the Management Proposal has an additional role of amending the future AMF Regulation. This is visible both from its title and from Art. 72, which stipulates that Member States will receive a € 10 000 contribution for each relocation of asylum seekers, beneficiaries of international protection and illegally staying third-country nationals subject to return sponsorship, whereas the contribution is increased to € 12 000 for unaccompanied minors. The same allocations apply in case of resettlements to the EU from third countries. This approach, whereby a legal act (in this case, the AMF Regulation) is amended by adopting a completely different act (Management Proposal), might not be the conventional way to make legislative changes. However, it is understandable considering the fact that the European Commission did not want to make changes to its AMF Proposal at the last moment before the trilogues, as this would probably prolong the procedure and delay its adoption.
Point 4 of the Explanatory Memorandum of the Management Proposal specifies that the total financial resources needed for its implementation for the period 2021-2027 will amount to € 1 113 500 million, which should cover total costs of all relocations. This is a significant amount, but in case more asylum seekers would need to be relocated and transferred, the Management Proposal suggests that additional resources should be requested. The lump sums of € 10 000 and € 12 000 are also considerable, but they will most likely not be sufficient to pay for the costs of integrating a refugee, which opens up the question whether more money should be allocated for this purpose. Additionally, it is questionable whether these amounts will create a sufficient incentive for Member States to opt for more relocations.
The experience from the two Relocation Decisions, adopted in the midst of the 2015/2016 refugee influx, is not promising (see here and here). Both Decisions stipulated that the Member State of relocation would receive a lump sum of € 6 000 for each relocation. After the expiry of the two-year implementation period of the Decisions, the results were disappointing. Out of 98 256 relocations, only 34 705 third-country nationals were relocated (21 999 from Greece and 12 706 from Italy). Obviously, neither the financial incentive, nor the fact that non-compliance with the prescribed relocation quotas would amount to the violation of their obligations under EU law motivated certain Member States to relocate. The lump sums offered by the Management Proposals are more generous than the ones prescribed by the Relocation Decisions, but it is questionable whether this will make a change.
4. Concluding Remarks: The Impact of Financial Costs on the Implementation of the Pact
The implementation of the Pact – in particular screening, border procedures and relocations – will generate considerable financial costs due to new procedures and administrative and operational requirements they impose on Member States. The implementation of the Pact will demand new infrastructure, equipment, operational activities, including relocation of third-country nationals, recruitment and training of new staff, access to databases and setting up of a new independent monitoring mechanism. New tasks will mostly fall on frontline Member States and those states where most relocations will take place. The Management Proposal foresees considerable funding for relocations, by proposing an amendment to the new AMF, which would enable financial support to the Member States of relocation, covered from the AMF thematic facility. However, all the three legislative proposals discussed above – the Management Proposal, the Screening Proposal and the Amended Asylum Procedures Proposal – envisage that the AMF and the IBMF financial envelopes will contain sufficient funding to cover the costs incurred by the implementation of the new instruments. It is difficult to predict whether this is accurate, especially for border and screening procedures, and how much of the costs will in the end be covered by national budgets, due to the limitations of the AMF and the IBMF thematic facilities, both in terms of their size and the Union co-financing rates.
One can expect that the statements about sufficient funding will not convince frontline Member States. Consequently, they will surely insist on laying down the specifics of the screening, border and return procedures that will define who does what and who pays for every single step of the procedures. The financial component of the Pact will surely play a major role in future negotiations.
Additionally, the complexity and deficiency of the rules proposed by the Pact create an additional risk in terms of the link between the financial impacts of the Pact and its successful implementation. The rules set by the Pact, as they currently stand, will make it difficult to properly implement the new procedures and make them work in practice. High financial costs will make their implementation even more challenging, as screening, border procedures, relocations and returns can be properly implemented only provided Member States are sufficiently capacitated and equipped. If this is not the case, new procedures might create the opposite effect from the desired one, as certain Member States might end up with more delays and violations of EU law, including asylum seekers’ rights, than they used to have. It is questionable how the Commission would react to such violations and whether it is going to try to compensate for deficiencies of the procedures by being reluctant to start infringement proceedings against the most affected frontline Member States in case they are not able to perform. For all these reasons, it is questionable whether the money that will be invested in the implementation of the Pact will be proportionate to the outcomes of the new procedures, in case they do not satisfy the expectations, in terms of their efficiency, speed and protection of fundamental rights.
This blog post is further elaborated under the same title in the my paper in the forthcoming book by Springer titled “The Future of Legal Europe: Will We Trust in It?” (eds.G. Barrett, J-P. Rageade & D. Wallis). I am grateful to Mr. Guy Stessens, Deputy Director at the Council of the EU, and Mr. Jeroen Lenaers, MEP, as well as to other interviewees from the European Commission, the Council and the European Parliament, who preferred to stay anonymous. I am also thankful to Prof. Daniel Thym and Prof. Philippe de Bruycker for their valuable comments and to Marco Paron Trivellato for his practical help. The usual disclaimer applies.
EU Pact Documents
Commission Communication on a New Pact on Migration and Asylum, COM(2020) 609 of 23 September 2020.
Commission Proposal for a Regulation introducing a screening of third country nationals at the external borders, COM(2020) 612 of 23 September 2020.
Amended Proposal for a Regulation establishing a common procedure for international protection in the Union and repealing Directive 2013/32/EU, COM(2020) 611 of 23 September 2020.
Proposal for a Regulation of the European Parliament and the Council on asylum and migration management and amending Council Directive concerning the status of third-country nationals who are long-term residents, COM(2020) 610 of 23 September 2020.
Proposal for a Regulation of the European Parliament and of the Council establishing the Asylum and Migration Fund, COM/2018/471 final, 12 June 2018.
Proposal for a Regulation of the European Parliament and of the Council establishing, as part of the Integrated Border Management Fund, the instrument for financial support for border management and visa, COM/2018/473 final, 12 June 2018.
From Tampere 20 to Tampere 2.0
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