Refugee influx threatens Germany's balanced budget: Schaeuble

AFP , Tuesday 13 Oct 2015

German Finance Minister Wolfgang Schaeuble
Germany's Finance Minister Wolfgang Schaeuble holds his speech during the European Banking Congress 2011 in Frankfurt November 18, 2011. (Photo: Reuters)

German Finance Minister Wolfgang Schaeuble conceded Tuesday that Berlin could miss its goal of achieving a balanced budget in its public finances next year because of the record migrant influx.

"We want to achieve this without taking on new debt, if possible," said Schaueble.

"They've asked me why I say 'if possible'. But the truth is: I don't know," the finance minister told a Berlin congress of machine-tool manufacturers.

Last year -- for the first time since 1969, and a year ahead of plans -- Germany managed to balance its budget, meaning the state did not take on any new debt.

The government under Chancellor Angela Merkel hopes that this will become the norm.

But the unanticipated costs of taking in up to one million asylum-seekers expected this year is going to place an additional burden on the public purse.

The massive influx constituted "a bigger challenge than a lot of things we've had to face in the past 65 years," Schaeuble said, adding that the costs posed "an incredibly large risk potential" for public finances.

Nevertheless, the minister insisted that "we can and will" cope with the challenge.

The government has promised billions of euros in aid to the regional and municipal authorities housing the migrants.

The federal government will play a flat-rate sum for each asylum-seeker "to put an end to all this wailing" from the local authorities, Schaeuble said.

Germany's hardline stance on budgetary rigour has been criticised by economists and many of the country's eurozone partners, who accuse Berlin of not investing enough.

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