July 8, 2018 / 5:30 PM / 12 days ago

German firms promised 'Marshall Plan' tax breaks for African projects

BERLIN (Reuters) - Germany plans to use public money to support companies which invest in Africa, part of a new “Marshall Plan” with which it hopes to tackle the roots of the refugee crisis that has convulsed European politics since 2015.

The aim was to reintroduce a scheme from the 1980s which made it easier for companies to write off losses on investments in Africa in order to moderate initial investment risks, Development Minister Gerd Mueller told Handelsblatt newspaper.

“I am also going to push for provisions made for African investments to get more favourable tax treatment,” he said on Sunday of the plan, being developed by his department, along with the finance and economy ministries.

The ‘Marshall Plan for Africa’, named after the U.S. aid package that kick-started Western Europe’s recovery after World War Two, is the centrepiece of Chancellor Angela Merkel’s scheme to reduce refugee flows by better sharing the costs of humanitarian issues between Europe, the Middle East and Africa.

Few details have been made public concerning the programme, which Merkel has argued is essential if Europe is to win African countries’ support for any policies aimed at stemming migration.

Since 2015, when Merkel, faced with unprecedented migrant flows, opened Germany’s borders to over a million refugees from civil war and poverty, the migration question has dominated European politics, fuelling the rise of far-right parties.

Under pressure from her own allies, Merkel conceded tighter border controls last week, but has continued to insist that Europe can only deal with refugee flows multilaterally, in cooperation with its African and Middle Eastern neighbours.

The EU is currently trying to sign deals with North African countries mirroring one signed with Turkey in 2016, under which Ankara was paid to take back many refugees who failed to win asylum in Europe.

Reporting by Thomas Escritt; Editing by Keith Weir

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