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26/09/2016

Germany’s Schäuble and Weidmann on collision course over migrants

Development Policy

Germany’s Schäuble and Weidmann on collision course over migrants

Wolfgang Schäuble and Bundesbank president Jens Weidmann

[Reuters]

Germany needs to send a message to the world that it is reaching the limit of its capacity to help Europe’s flood of migrants, German Finance Minister Wolfgang Schäuble said on Sunday – while the head of the Bundesbank said the country can handle the costs of the refugee crisis without risking its balanced budget.

Germany has become a magnet for people fleeing war and violence in the Middle East. It expects 800,000 to a million refugees and migrants to arrive this year, twice as many as in any prior year.

“We need to send a clear message to the world: we are very much prepared to help, we’ve shown that we are, but our possibilities are also limited,” Schaeuble said in an interview with ARD television.

Meanwhile, Jens Weidmann, the head of the Bundesbank, was upbeat about the prospects for Germany’s economy.

“Germany is in a good position. We have a really strong upturn and high levels of employment, even if the growth rate may have weakened somewhat in the second half,” Weidmann said in an interview with the Tagesspiegel newspaper.

>>Read: Germany set to face difficult financial year in 2016

Weidmann also dismissed suggestions that the influx of refugees could endanger the “schwarze Null” or ‘black zero’, meaning the balanced budget the country achieved in 2014 for the first time since 1969.

“In spite of all the uncertainties, I don’t see at the moment any reason to write off the ‘schwarze Null’,” Weidmann said.

Last week, Schäuble said Germany would balance the budget again in 2015, but was more cautious for next year, pointing to “high uncertainties” about how many refugees would continue to come to Germany.

Weidmann warned against softening European Union budget rules due to the refugee crisis, saying the European Stability and Growth Pact already accommodated for extreme and surprising burdens on individual countries.

He said the refugee crisis could only be mastered if Germany succeeded in integrating those who stayed, including by getting them into the labour market.

“As a result refugees could then contribute to easing our demographic problems. But they won’t solve them,” Weidmann said.

Restricting family reunions for Syrian refugees

The pace and scale of the influx has put pressure on local communities and opened a rift among the ruling coalition parties over the best way to handle the crisis.

The divisions re-opened over the weekend, after Interior Minister Thomas de Maiziere said in future Syrian refugees would receive modified refugee status and be barred from having family members join them, a statement he later retracted.

The Social Democrats (SPD), who share power with Chancellor Angela Merkel’s conservatives, rejected that proposal.

Schaueble, however, spoke out in favour of the measure and said it was a proposal that the government was examining in detail.

“I think it’s a necessary decision and I’m very much in favour that we agree on this in the coalition,” he said.

Horst Seehofer, the leader of Merkel’s Bavarian allies, the Christian Social Union (CSU), also backed de Maiziere’s suggestion, telling the Sueddeutsche Zeitung that the refugee status of Syrians should be individually checked.

>>Read: How Germany actually deals with 10,000 refugees a day

The latest row comes after the coalition ended weeks of infighting on Thursday evening on how to speed up the deportation of asylum seekers who have little chance of being allowed to stay.

Vice Chancellor Sigmar Gabriel, who is also leader of the SPD, said it was important that the government first implement the measures it had agreed to rather than coming up with new ones on a daily basis.

“This creates the impression that in the German government the left hand doesn’t know what the right hand is doing,” he said.