Unexpected Surplus

Operation Squirrel

BA Frank Juergen Weise PR
Federal Employment Agency boss, Frank-Jürgen Weise, is watching his money closley.
  • Why it matters

    Why it matters

    The agency wants to hold the surplus funds in reserve in case of bad times ahead, while critics say social insurance contributions should be reduced instead.

  • Facts

    Facts

    • The German Federal Employment Agency will end the current year with a surplus of €3.5 billion.
    • Critics say the refugee crisis will cost the government more money and thereby create a need for surplus funds.
    • The agency’s total reserve is expected to reach €9.5 billion by the end of 2016.
  • Audio

    Audio

  • Pdf

 

Sometimes it makes sense to make yourself seem poorer on paper than you really are.

German Finance Minister Wolfgang Schäuble knows this, as it’s the only way he can fend off greedy demands from his cabinet colleagues.

Frank-Jürgen Weise, head of the German Federal Employment Agency, or BA, is also careful with his money. After all, any surplus in his agency’s coffers creates an appetite for a reduction in unemployment insurance contributions, especially in times of rising health insurance and nursing care insurance premiums.

But as the year comes to an end, Mr. Weise must also put his cards on the table. During the quiet holiday season, he announced that the agency will end the current year with a surplus of €3.5 billion, or $3.85 billion, instead of the €400 million originally expected.

Does this mean a reduction in the contribution to unemployment insurance, which has been 3 percent of gross income since 2011?

“Consistently lower contribution rates are key,” said Oliver Zander, managing director of the Federation of German Employers’ Associations in the Metal and Electrical Engineering Industries and a member of the BA supervisory board. “That’s what the surplus must be used for.”

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