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Germany's big surplus to cover costs of refugees

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Refugees at a canteen in Baden-Württemberg in October 2015. Photo: DPA
11:36 CET+01:00
Germany's economy picked up speed and afforded the government a big surplus in 2015 - which will be put straight towards spending on refugees.

The German economy, Europe's biggest, grew by 1.7 percent in 2015, fractionally faster than in the year before, the federal statistics office Destatis said on Thursday.

That growth rate was above the average for the past ten years for the second year in a row, following on from growth of 1.3 percent in 2014.

At the same time, Destatis said that Germany notched up a surplus on its public budget equivalent to 0.5 percent of gross domestic product (GDP).

In concrete terms, GDP amounted to €3.027 trillion in 2015, the first time ever that it has topped the three-trillion mark, Destatis said.

Output was generated by more than 43 million people in employment, the highest level since unification in 1990, Destatis said.

Surplus cash to pay for refugees

The budget surplus – twice as big as the Finance Ministry expected in November predictions – is likely to mostly be put towards spending on refugees.

"We will urgently need the reserve to finance the additional services in accommodating and integrating the refugees," Finance Minister Wolfgang Schäuble said in Berlin on Wednesday.

Under current plans, the federal government will spend roughly €8 billion on refugees in 2016.

That's made up of around €3.3 billion in extra federal spending on unemployment and other benefits, plus €4.3 billion for the states and municipalities.

Schäuble's spending forecasts count on around 800,000 more refugees arriving in Germany this year – significantly fewer than the 1.1 million who arrived in 2016.

But the Finance Minister insisted that "in this year [2016], too, we want to get through without any new debts if possible."

Schäuble has made achieving the so-called "Schwarze Null" (black zero – a shorthand for no new debt) the holy grail of his management of the nation's coffers over his time in office.

And he's backed by his party in refusing to consider additional spending for other purposes.

There is no "room for euphoria and new spending wishes," said Ralph Brinkhaus, deputy leader of the Christian Democratic Union (CDU) group in the Bundestag (German parliament).

"We need every cent to cover the costs of refugees and immigration," Brinkhaus added.

Opposition politicians from the Green and Linke (Left) parties criticized Schäuble's focus on controlling debt, saying that police, schools, education, pensions and social housing were going underfunded.

'Solid and consistent growth'

"The economic situation in Germany in 2015 was characterised by solid and consistent growth," said Destatis president Dieter Sarreither.

"Almost all industrial sectors saw growth," he said.

And the increased economic activity was driven primarily by domestic demand, Sarreither continued.

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"Consumption was the most important growth engine in the Germany economy. Investment and foreign trade helped support the positive trend, too, but to a much smaller extent."

Private consumption was up 1.9 percent in 2015 and government spending grew by 2.8 percent.

Investment in machinery and equipment advanced by 3.6 percent.

Exports were up 5.4 percent and imports expanded by 5.7 percent.

Another key factor was the robust labour market, with more than 43 million people in employment in 2015, the highest level since unification in 1990, Destatis said.

SEE ALSO: Merkel refugee welcome 'unconstitutional': judge

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