World Economy

German Economy Facing Challenge of Refugees

German Economy Facing Challenge of Refugees German Economy Facing Challenge of Refugees

Pierre Moscovici, European commissioner for economic and financial affairs says: “If I look at Germany, I would say, the German economy is clearly the leader in Europe and in the eurozone and so Germany shouldn’t be blamed for its successes.

External surpluses are huge, growth is a bit above the average trend in the eurozone with a population which is more aging than elsewhere and therefore the need for creating jobs are less. We also see the unemployment rate is the weakest in the eurozone. So success is overall. But still there are challenges", Moscovici said in an interview with Euronews.

First, he said, there are the global economic challenges. Germany has external surpluses and they are huge now, something like 9% which creates an imbalance that has to be addressed not only by the German government but also in the framework of the eurozone.

"And we know what is the response–the response is clearly investment. The German government is very conscious of that. I speak with Wolfgang Schuable very often about that and already there were 15 billion of pubic investment which were delivered last year. I think 10 for the central government and 5 for the local authorities and those lenders that need that, especially on infrastructures because there is a huge need for infrastructures in the former eastern part of Germany."

Refugee Crisis

And then comes the refugee crisis, which is a specific need. There will be high costs for welcoming of refugees and integration of refugees, Moscovici said.

"On the economic point of view–refugee crisis can be an opportunity–if we are ready and capable of integrating those people we need to welcome because they are moving away from regimes that are a threat for their own lives."

Reports say they are pretty skilled as well. They probably are skilled "but not exactly in our standards". And again, there are needs in the German labor market and there is also some skills and some capacity which are available there. "But we need to have both moving together." And this needs public policies–learning the language, adapting skills to labor needs and this is a very important effort."

It is probably billions of euros which are needed there, he said. So how to get that? The first origin of those funds is national. And it is known that the German budget will be dedicated partly to that.

Again, Schauble declared a few weeks ago he thought there was an effort there which had to be fulfilled. But Germany is also asking its European partners for solidarity, Moscovici said.

"And we must listen to that. Schauble talks about a tax on oil for the refugee crisis–I’m not sure tax, oil and refugees are very popular but I think we need to examine that. Must there be a tax, on what–can there also be a part which are not for the financing of the sovereign debt of a state which is threatened by too high debt." Probably not. These debates must take place and has to be addressed properly, he said.

At least 34% of surveyed German human resources directors intend to hire refugees this year or next year, Spiegel Online news website reported, citing a study conducted by the Ifo research center.

It was noted that the number of people who were ready to hire asylum seekers had increased from about 7% in the past two years.

Europe has been beset by a massive refugee crisis, with hundreds of thousands of undocumented migrants fleeing their home countries to escape violence and poverty. According to German Interior Ministry estimates, the country registered some 1.1 million refugees in 2015, nearly five times more than the number registered in 2014.