European Union trims eurozone growth outlook

“In 2017, GDP growth is set to gather speed and is projected at 2.7 percent as implemented structural reforms strengthen aggregate demand”, it said.

The expected influx is also likely to “translate into additional employment, once refugees with a sufficient degree of skills enter the labour market and participate in economic activity”.

“The system is now up and running – the first flight from Greece [has left] and there were already several flights from Italy – and we’re hoping that progress on the ground and progress with member states will be made swiftly”, Ernst said.

New housing as a result of a recovery in the construction industry was expected to be fuelling Ireland’s economy by now, but this is not happening, the European Union has admitted in its winter economic forecast. Unemployment in the euro area will stick at double digits, falling from 11pc this year to 10.3pc in 2017.

Tove Ernst, a migration spokeswoman for the European Commission, says it took time to put the mechanisms in place on the ground to facilitate relocation.

Predicting that the economy of the 19-country eurozone would grow 1.6 per cent for this year as a whole, followed by 1.8 per cent in 2016 and 1.9 per cent in 2017, the report attributed the impact partially to the migrant influx.

The Commission’s simulations are based on the assumption of 3 million refugees arriving between 2015 and 2017, a million this year, 1.5 million next, and 0.5 the following year.

Despite its cautious outlook for the next couple of years, the commission said credit constraints are “clearly receding” and market funding will continue to play an increasing role in supporting investment, which should start becoming a stronger driver of growth.

Earlier this year, EC predicted that the Polish economy would grow this year at a rate of 3.3 percent, against 3.4 percent in 2016.

“If managed properly, the inflow of refugees will have a small favorable effect on growth in the short and medium term”, the report concluded. Domestic demand will be the main driver of growth over this period, the agency said, accounting for 0.7 percentage points of GDP growth in 2015 and 1.2 percentage points both in 2016 and 2017.

The new projections show France’s budget deficit at 3.3% of gross domestic product in 2017, missing the 3% target it had agreed with Brussels. It is also expected to raise the EU’s economic output by 0.2-0.3 percent, it added.

Downside risks include what the Commission diplomatically referred to as “the recent turmoil in main trading partners” as well as sanctions against Russian Federation, which it said could weigh more on activity than forecast.