Refugee crisis

Industry’s hearty refugee welcome begins to crack

Industry's hearty refugee welcome begins to crack
Will refugees contribute to German economic success? Photo: DPA
German industry was initially eager to welcome the hundreds of thousands of refugees arriving into the country - but sceptical voices are being raised about the potential costs of the huge influx to Europe's biggest economy.

The head of Germany's construction industry association, Michael Knipper, is making waves with a letter addressed to the powerful BDI industry federation in which he accuses it of propagating a “one-sided” view of the issue.

BDI's “emphasis is too much on the opportunities, and too little on the risks related to the huge, unchecked immigration,” Knipper wrote.

“I cannot share the undifferentiated euphoria about the influx of refugees that is being expressed in large parts of the German economy and industry,” the letter said.

“It would be illusory to believe that we will be able to find jobs quickly for all those refugees currently arriving in Germany.”

And he said it was naive to suggest, as Economy Minister Sigmar Gabriel and a chorus of economic experts have done, that the influx could constitute “a small economic stimulus package”.

Under the official scenario, billions of euros will be spent on taking in the refugees, housing them and integrating them into the labour market – but the additional demand they generate would more than make up for the investment.


The construction sector, in particular, should stand to benefit the most, the argument goes.

“But it's precisely because of this point that we're in a good position” to be a warning voice, an industry federation spokesman told AFP.

The federation is concerned about the long-term effects of the influx.

Public money spent on the refugees will mean less cash to fund education and infrastructure, where the construction industry and the overall economy would benefit in the long run, the federation argues.

German industry has so far always insisted the arrival of a million refugees or more would be positive, given the country's rapidly ageing population and the ever-growing shortage of qualified labour.

So the critical industry voices in the debate are new.

But enthusiasm among the general population is also beginning to wane as the numbers of newcomers surge.

Even though economists continue to predict positive effects for the labour market in the long-term, some experts agree that the number of refugees could actually push the official jobless figures in Europe's powerhouse economy higher in the short-term.

Many of the new arrivals do not speak German and their qualifications do not necessarily match the needs of the market, where engineers and IT specialists are particularly in demand.

Can Germany cope?

While BDI chief Ulrich Grillo insisted only last month that the majority of Syrian refugees were highly qualified, “the Syrian doctor isn't the norm,” conceded Labour Minister Andrea Nahles.

“The majority of Syrians arriving have little chance of getting a foothold in the labour market in the short or medium term,” said Carsten Linnemann, who heads a group of small and medium-sized companies within the conservative CDU

He estimates that “only one in 10 refugees could be placed on the labour market.”

The Munich-based think tank Ifo also believes that the ability of the German labour market to absorb the refugees is limited.

But its president Hans-Werner Sinn likes to style himself as an economic doomsayer and the institute's predictions are viewed with increasing irritation in Berlin, where industry associations prefer to rally behind Angela Merkel's call of “we can cope”.

Defying all such doubts, some German companies are rolling up their sleeves and hiring refugees on the spot.

Carmaker Daimler, for example, announced last week that it had hired 40 refugees as apprentices in collaboration with the local federal labour office.