Thursday Summit

Merkel, States to Square Off on Refugees

Merkel with state governors dpa
After the E.U. summit, it's time for the battle at home over housing the refugees.

As Chancellor Angela Merkel this week leaves one refugee summit for the next, she is facing a tough decision in Berlin tomorrow.

When Ms. Merkel boldly declared last month “we can do it,” absorbing perhaps 1 million refugees this year, she neglected to say how.

And now Germany’s municipalities and states – saddled with the lion’s share of costs for refugee accommodation – want an answer.

“What we need is a long-term concept instead of planning from summit to summit,” Matthias Miersch, a Social Democrat member of the Bundestag, told Handelsblatt Global Edition.

At a meeting tomorrow with state premiers, Ms. Merkel may be forced into making a multi-billion-euro concession to keep the political peace at a volatile moment when Germany’s commitment, and Ms. Merkel’s promise, are under political attack.

It’s still unclear whether she’s willing to free up billions of euros — a new estimate puts the cost for new arrivals this year at €10 billion ($11.2 billion) — which could jeopardize the country’s coveted balanced budget.

Her finance minister, Wolfgang Schäuble, has already taken flack for announcing plans to shave €2.5 billion from other federally funded programs to cover the exploding refugee costs.

But another round of costly, unplanned spending could give her political opponents ammunition. While Ms. Merkel remains Germany’s most popular politician after a decade in power, she is facing unprecedented heat from conservatives in her own ruling coalition over her promise of generosity and hospitality to thousands of homeless people from Iraq, Syria and other war zones in the world.

State political leaders said they are expecting concrete actions — namely money from Berlin and a reform of Germany’s overly bureaucratic asylum application process — rather than vague promises.

“At five to six months on average – or up to 11 months in individual cases – [the time it takes to process applications] is far too long. ”

Rudi Hoogvliet, Spokesman, Baden-Württemberg state government

“Warm words, sound comments and useless visits on site aren’t helpful,” Horst Seehofer, the Bavarian state premier, said Tuesday at a speech in Bad Staffelstein. “We are in a state of emergency.”

German states say that the federal government, which controls Germany’s borders, is not paying enough for its magnanimity.

“So far, the federal government only contributes 10 percent to the total cost that the federal states and municipalities have to cover,” Rudi Hoogvliet, a spokesperson for the state of Baden-Württemberg, said. “That has to be significantly increased.”

One of Germany’s richest states, Baden-Württemberg and its capital, Stuttgart, are run by the Green Party in a coalition with Social Democrats, who are the junior party at the federal level in Ms. Merkel’s left-right coalition.

For next year, German Finance Minister Wolfgang Schäuble has earmarked €6 billion, or $6.7 billion, in additional funding for refugees. Of that, €3 billion will go to federal programs, including the federal agency for migration and fefugees, or BAMF, which processes asylum applications; and €3 billion is to go to the states.

Some states claim far more is needed.

“The federal government should shoulder half the actual cost for housing and providing for refugees over the long term,” Alexander Fischer, a spokesman for the Thuringia state government, said. He noted that Thuringia, the only state run by Germany’s Left party of reformed communists, expects refugee costs of about €470 million next year and €600 million in 2017.

Many states and municipalities are hoping that Thursday’s summit will produce a binding mechanism to distribute federal funds on a per-refugee basis.

“What we need are sustainable financial commitments,” Burkhard Lischka, a parliamentarian member of the Social Democrats and spokesman for the fraction’s interior policies, told Handelsblatt Global Edition. “This means we should provide a lump sum per refugee.”

Mr. Lischka declined to specify the level of refugee subsidy he thought appropriate ahead of the meeting in Berlin.

But Eva Lohse, president of Germany’s association of cities, provided a ballpark figure.

“Every refugee generates about €10,000 per year in costs,” she said.

The Ifo research institute expects ever-increasing costs, including up to €10 billion for 800,000 refugees to arrive this year.

Housing will eat up a big chunk of that money.

Ms. Lohse warned against creating a situation where low-income families and refugees competed for affordable housing. Currently, the federal and state governments provide €2 billion in funding each year to subsidize affordable housing.

Ulrich Maly, the mayor of Nuremberg in Bavaria, said the federal and state governments should at least “double their funds” for affordable housing.

Massive Influx of Refugees Expected asylum seekers 1


The agenda for tomorrow’s meeting includes incentives to attract investors to affordable housing and ease building codes.

High on the agenda is a scheme to expedite asylum applications. Interior Minister Thomas de Maizière already has proposed changes to the asylum law, which, among other things, would allow authorities to take decisions faster.

Speed is of the essence, according to state officials.

“At five to six months on average – or up to 11 months in individual cases – [the time it takes to process applications] is far too long,” Mr. Hoogvliet, the Baden-Württemberg spokesman said. “It has to be radically reduced to a maximum of three months.”

Added Mr. Lischka, the Social Democratic policy spokesman: “Considering that an employee processes an annual average of 400 applications, simple math tells us [the current numbers] are not sufficient.”

At the meeting on Thursday, Frank-Jürgen Weise, the new head of Germany’s migration and refugee agency, plans to announce an increase in staff, redeploying people trained to work in federal employment offices, observers say.

Mr. Weise has already announced plans to create greater transparency in Germany’s asylum processing, from the initial contact of refugees by police to their applications with the refugee agency authorities, and later, with employment officers. This will require connecting computer systems used by these authorities, a move that could face legal hurdles on data protection grounds.

The federal goverment would also like to speed integrating refugees into the workforce and send home sooner those whose applications are rejected. It also wants to significantly reduce the cash given to refugees and replace it with material goods, such as food and clothing.

Ms. Lohse has called for speeding the asylum process by only sending those people with realistic chances of approval to permanent accommodations across Germany. The rest should remain in intake centers run by the federal government, and, if rejected, be sent home quickly, Ms. Lohse added.

And Baden-Württemberg would like the federal government to get creative to solve the backlog of asylum applications at the federal agency.

“Maybe officers from other authorities that are not so squeezed right now could temporarily help out at the BAMF,” said spokesman Mr. Hoogvliet. Another option would be a cut-off rule, he said. All applications handed in before a specific date, say April 1, 2014, but not processed, would be just rubber stamped. That would apply to 12,000 to 13,000 people, he added.

Because up to 96 percent of refugees from Syria are eventually granted asylum, Mr. Hoogvliet could envisage a fast-track process, he said. “That means that certain groups, that is people coming from countries like Syria who undoubtedly have a very high chance of having their asylum applications approved, are just all given the right to stay, without going through the system,” he said.

Whether the new refugee chief, Mr. Weise, can solve the backlog, remains to be seen. He took on the job this week after his predecessor,  Manfred Schmidt, stepped down amid severe criticism for not keeping up with the refugee influx.


John Blau is a senior editor with Handelsblatt Global Edition. Franziska Roscher is an editor with Handelsblatt Global Edition in Berlin. To contact the authors:;

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