German government boosts funding to states for refugees

[BERLIN] The German government agreed on Thursday to give its 16 regional states around 4 billion euros (S$6.4 billion) next year to help them cope with a record influx of refugees that is straining their budgets and resources.

Chancellor Angela Merkel made the announcement after meeting state premiers to discuss ways of helping the states, which are struggling to look after 800,000 asylum seekers expected this year alone.

Ms Merkel said the government would pay the states 670 euros each month for every asylum seeker they took in.

Sources from her SPD coalition partner indicated that the package could be worth around 4 billion euros once extra payments for providing social housing and looking after unaccompanied young refugees were taken into account.

The government had previously pledged to offer the states 3 billion euros for next year to help cover the additional costs of housing and caring for the refugees and asylum seekers.

German public opinion has been divided on the rising numbers of new arrivals, with some warmly welcoming people fleeing conflict in the Middle East and Africa but others concerned about how easily they can be integrated.

Ms Merkel told the German parliament earlier on Thursday that the European Union needed the support of the United States, Russia and countries in the Middle East to help tackle the underlying causes of the refugee crisis.

Ms Merkel has been criticised by some eastern EU neighbours for what they see as actions that have fueled the influx of people trying to reach Germany.

As well as feeding and housing the newcomers, Germany is also weighing their impact on Europe's largest economy.

Finance Minister Wolfgang Schaeuble said he still aimed to maintain a balanced budget next year. Some lawmakers have questioned whether that will be possible given the rising costs associated with the migrant crisis.

Mr Schaeuble said looking after the refugees took priority over everything else but it was still his intention to try to stick to his target. "We have a clear commitment to get by without taking on new debt and tax increases," he told ARD German television.

Business leaders and the government have said migration can help counter the effects of an ageing population and prevent longer-term shortages in the German labour markets.

The sudden arrival of so many refugees could push up unemployment next year, however, the German labour office research institute IAB said on Thursday, forecasting a reversal of this year's decline in the jobless tally.

REUTERS