Finance plea

E.U. Asks Arab Countries for Refugee Aid

fugees_reuters
Croatia is the latest E.U. member state to struggle under the weight of the refugee influx.
  • Why it matters

    Why it matters

    Some E.U. member states are struggling to cover the costs of the huge numbers of refugees and migrants arriving daily in their countries.

  • Facts

    Facts

    • The European Commission has raised €9.2 billion ($) to deal with the refugee influx.
    • Several member states are yet to contribute to two key trust funds for Syria and African countries.
    • Commission vice president Kristalina Georgieva wants Muslim countries to donate some of their alms money.
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    Audio

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With the European Union struggling to cope with an unprecedented refugee influx, the bloc’s executive commission has called on Arab countries to do more to help asylum seekers.

In an interview with Handelsblatt, Kristalina Georgieva, the European Commission’s vice president and budget commissioner, said Arab states should offer more financial aid to the refugees, many of whom are arriving from the Middle East.

She suggested that annual charitable donations by Muslim countries could be used to plug some of the humanitarian aid gaps that have opened up as some E.U. countries have become overwhelmed by the huge numbers of arrivals.

“I’m thinking, for example, of the collection of Zakat alms in Muslim communities, through which last year alone €600 million ($682 million) were collected,” she said. “If we could mobilize even 1 percent of this for refugees, the gap in humanitarian aid for refugees would already be closed.”

Europe, for its part, is reaching its limit when it comes to aid for refugees. “We have scratched together every cent and doubled the funds for combating the refugee crisis from €4.5 billion to €9.2 billion,” Ms. Georgieva said.

“It is obvious that more money is necessary to get a handle on the refugee crisis.”

Manfred Weber, Head of European People’s Party, E.U. parliament

There are also concerns in some member states, including in Germany, that the unexpectedly high costs of the refugee crisis could evaporate budget surpluses or exacerbate deficits.

“It is obvious that more money is necessary to get a handle on the refugee crisis,” said Manfred Weber, head of the conservative European People’s Party in the E.U. parliament. Member states must “live up to their responsibility” and make available “substantially more money,” he said.

But some governments are skimping. So far, two new E.U. Trust Funds for Syria and Africa have received only €44 million of the €2.3 billion promised. France, Poland, Belgium, the Netherlands and Hungary have yet to contribute anything to the funds to date, despite daily warnings from the European Commission.

The trust funds were launched with the goal of improving living conditions in the crisis regions, in order to address the root causes of the current situation.

The European Commission also plans to propose reforms to expand the protection of the E.U.’s external borders and improve asylum policies in the economic bloc.

“Should these reforms be associated with costs, we will have to also think about additional financing here,” Ms. Georgieva said.

But the commissioner dismissed a broader reform of the E.U.’s budget or possible cuts to the agriculture budget in favor of integration or foreign policy, saying any such decisions wouldn’t be taken until 2016.

commissioner
Kristalina Georgieva wants both E.U. members and Arab states to contribute more cash to support refugees. Source: Erik Luntang for Handelsblatt

 

While some have suggested some sort of solidarity tax for refugees, Ms. Georgieva said there were “no plans for new taxes on the table.”

But high-ranking E.U. officials, speaking anonymously, say there is a need for “double-digit billions of euros.” Despite the best of intentions, that much money cannot be squeezed from an already deficit-ridden E.U. budget, unless it can be saved elsewhere, they said.

At least in theory, one upcoming opportunity could be the European Union’s 2016 review of its spending, including heavily criticized agricultural subsidies. But political willpower to slash such subsidies is lacking – both in Brussels and Berlin.

If member states are not willing to make sacrifices, new financial resources must be found. That search has been long under way. For instance, European Commission President Jean-Claude Juncker and German Finance Minister Wolfgang Schäuble have been developing a proposal for an E.U.-wide surcharge on gasoline.

“The thought is between 0.3 and 0.5 percent,” said a high-ranking E.U. diplomat. Mr. Juncker was preparing to move on the proposal, according to the source. The European Commission has long sought its own European gas tax, but member states have always undermined the effort. Mr. Juncker believes the refugee crisis could change that, the source said.

But German Chancellor Angela Merkel says that’s not going to happen. And without her support, there is no chance it will move forward, according to one commission member.

“We neither want to increase taxes in Germany, nor do we want to introduce an E.U. tax,” said government spokesman Steffen Seibert earlier this month. Ms. Merkel even gave her “definitive” word that the refugee crisis would not lead to tax increases.

For now, at least, Mr. Juncker has shelved the idea.

Some in Brussels find that regrettable. “In times of sinking gas prices, a petroleum tax makes sense ecologically,” said Sven Giegold, a German Green Party member in the E.U. parliament.

Others, however, are in complete agreement with the chancellor – and not just for financial reasons.

“We don’t need tax increases,” said Martin Schulz, president of the E.U. parliament, who is concerned that slapping on new taxes to deal with the refugee crisis could enflame xenophobia.

 

Ruth Berschens heads Handelsblatt’s coverage of European policy. Thomas Ludwig is the paper’s correspondent in Brussels. To contact the authors: berschens@handelsblatt.com, ludwig@handelsblatt.com

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