Germany is taking in large numbers of refugees. Taking care of them costs money, but not anywhere near as much as some people think, given Germany’s huge overall budget. DW looks at the numbers.
In 2013, Germany spent around 1.5 billion euros ($1.67 billion) on allowances for asylum seekers, or about 12,500 euros per refugee per year, according to official statistics. If per capita costs stay the same, Berlin might find itself spending as much as 10 billion euros in 2015 to feed, house and teach German to the new arrivals.
But given the German government’s 301 billion-euro budget, 10 billion suddenly seems a lot more manageable – even to Germany’s notoriously frugal finance minister, Wolfgang Schäuble.
When informed by his counterpart in the German labor ministry, Andrea Nahles, that she would require an additional 1.8 billion to 3.3 billion euros next year to provide for refugees and give them language and vocational training, Schäuble didn’t balk at the sum.
There is a basic consensus in Berlin about what is at stake and the money that will be needed to meet the challenge of accommodating the rising number of refugees flocking to Europe’s largest economy. By 2019, it could take as much as 7 billion euros extra a year.
‘We will profit from this’
Nahles estimates that in 2016 there will be between 240,000 and 460,000 additional people who are officially registered and entitled to look for work but who have not found a position yet. Of those, between 175,000 and 335,000 should be in a position to work.
In 2019, the figure could go up to 1 million, depending on how many family members join refugees who will have already made it to Germany. The Labor Ministry estimates that around 800,000 refugees will come to Germany each year, with 35 to 45 percent of those allowed to stay.
Germany’s Federal Labor Agency is bracing for a run on its job centers next year. According to the latest statistics, 161,000 people from the top-10 countries Germany takes migrants from were unemployed.
“We will profit from this, too,” Nahles emphasized, “because we need immigration,” she added, stressing Germany’s lack of skilled workers. “The people who come to us as refugees, should be welcomed as neighbors and colleagues.”
Paying in more than they take out
Nahles also wants a clear commitment of funds for the integration of refugees in the labor market so that the Labor Agency can expand its efforts nationwide.
Existing so-called integration classes for approved asylum seekers are insufficient, Nahles says, as they do not teach German to the desired level. She would like to see language classes paid for entirely at the federal level, as German skills are key to entering the workforce.
A study by the Center for European Economic Research (ZEW), commissioned by Germany’s Bertelsmann Foundation, shows that in 2012, the roughly 6.6 million foreigners living in Germany paid 22 billion euros more in taxes that year than the total sum of allowances they had been given, such as funds for training, education, social security or benefits.
No ‘cost-benefit’ analysis
Steffen Angenendt from the German Institute for International and Security Affairs (SWP), which has been advising the government as well as companies for over 50 years, has warned seeing the integration of migrants through the lens of a “cost-benefit analysis.”
In an interview with DW, Angenendt stressed that it was very difficult to ascertain what refugees cost and of what benefit each one could be for the economy.
“What are we supposed to say? A refugee is only allowed to stay if he yields a net profit of 2,000 euros a year? What if he doesn’t? I find this whole discussion highly dubious,” Angenendt said.
“We had a rather fierce debate among various economists on this recently. And they all came up with different numbers – for migrants alone,” he says, adding that it is even harder to predict the numbers for refugees.
Of course, he says, refugees should be integrated into the labor market as soon as possible. “But we also have to bear in mind that we took these people in not because they can work but because they needed protection. And that has to come first.”