1 million refugees in 2015, more than just a financial challenge for Germany?

Once a month the second channel of the public German TV network (ZDF) polls the standing of the ten most important German politicians. For the last two years chancellor Angela Merkel has been the clear front-runner. Not so in September. She lost her No 1l position to the federal finance minister Wolfgang Schäuble and took just 4th place.

This is not hard to understand.Germans, although by a majority (57%) in favour of welcoming refugees and immigrants, are starting to question whether the country can absorb 1m people this year and doubt that the Chancellor was right to invite everybody to come to Germany if s/he considers it the ideal country of destination. As many as 43% feel that Merkel is not doing a good job when it comes to refugee policy – even 27% of her own party are unhappy.

The Chancellor is renowned for insisting on respecting EU rules and commitments (e.g. in the Euro-crisis). Now, rather suddenly, she has stopped enforcing the Dublin agreement according to which those countries have to register refugees where these first enter European territory . The situation in Greece and Italy had worsened so much she felt that for pragmatic reasons the door had to be wide open. When the refugees entered Germany by the tens of thousands without any registration, finger print or health check, she decided to temporarily suspend the free crossing of borders under the Schengen agreement.

Germany reckons that as many as 1m may arrive this year, most of them from Syria (20%), Kosovo (18%), Albania (14%), Serbia (6%), Iraq (5%), Afghanistan (5%) and Macedonia (3%). Since November last year people arriving from Macedonia, Serbia and Bosnia-Hercegovina are considered to be coming from safe countries and, as „economic migrants”, will in more than 99% of all cases be refused asylum and sent back. To this list the German government has now added Albania, Kosovo and Montenegro. In contrast, refugees from Syria, Afghanistan, Iraq and Eritrea will be accepted as true refugees by almost 100%.

The selection process has taken far too long in the past and will be shortened. Applicants will also be given the opportunity to enter the labour market much faster than hitherto. Nonetheless, integrating 1m people and who knows how many over the next years is a tremendous challenge. The cost will be enormous. Last year 203.000 sought asylum at costs of about €2.4 billion. This year the cost will be €10 billion-plus.

Fortunately, the economic and financial situation is solid right now. So it should be possible to shoulder the additional cost without additional taxes. However, it is questionable whether the federal budget will remain balanced without additional debt. The annual cost per refugee is estimated to total € 12-13,000. The federal government agreed to give the Länder and municipalities an extra €5 billion. But they still face a huge challenge, since as of 2019 they will no longer be permitted by constitutional law to run up any debt themselves. Already there are proposals to set up a € 800m migration fund that will be paid for by industry as well as government.

The real problem, however, is not financial. The new citizens come from countries that differ from Germany in almost every aspect of society: religion, democracy, rule of law, gender equality, personal freedom and sense of personal responsibility. Integrating these new-comers effectively, so they can contribute to Germany’s culture without losing their own identity and without destroying the value system of the host country is a huge task. To succeed, the refugees have to learn the German language as quickly as possible and have access to the job market. Germany has to show much more flexibility than in the past when it comes to considering diplomas and professional certificates as equivalent to German ones.

The whole challenge could be met much more easily in a truly European context. It is unacceptable that the EU is far from being a union of solidarity that only a few countries (notably Germany, Austria, Sweden) have agreed to accept the bulk of the refugees coming to Europe. Two thirds of Germans therefore see the EU’s cohesion in real danger. Also, when it comes to solidarity in other cases (like the Euro crisis, notably Greece) the willingness to show it in future may no longer exist.

Germany has had experience with foreigners settling there. In the 1960s and 70s millions of “guest workers” came from Southern Europe, the former
Yugoslavia and Turkey. They came on the understanding they would stay only for a few years. But most of them have settled in Germany for good. Many have completely assimilated, others kept their identity, but are good citizens respecting the German law and regulations. Only a few try to change society and to introduce their own rules and beliefs.

They all have made a major contribution to building and expanding the German economy. Without them the lasting success of the German Wirtschaftswunder would have been impossible. Germany is an aging country and badly needs new young people that can help to fill the demographic gap. Refugees therefore are not only a challenge but a major chance to buttress German economic strength.

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