October 29, 2015 / 1:11 PM / 4 years ago

Germany to spend up to 16 billion euros on refugees next year

BERLIN (Reuters) - Germany’s federal states and municipalities could face costs of up to 16 billion euros (11.47 billion pound) next year to deal with the refugee crisis, the Association of German Cities said on Thursday.

Migrants walk along a street after passing the Austrian-German border in Achleiten near Passau, Germany, October 29, 2015. German Chancellor Angela Merkel came under intense pressure for her handling of the refugee crisis on Wednesday, with her Bavarian allies warning of a full-blown coalition crisis unless she takes immediate action to limit a record influx of migrants. REUTERS/Michaela Rehle

Europe’s richest country has become a favoured destination for people fleeing war, violence and poverty in Asia, Africa and the Middle East. It expects 800,000 to a million migrants to enter the country this year, twice as many as in any prior year.

Germany’s states have long complained that they are struggling to cope with the record influx and have urged the federal government in Berlin to provide more help.

Helmut Dedy, deputy managing director of the Association of German Cities, said the federal states and municipalities could end up spending 7 billion to 16 billion euros on costs related to refugees next year, depending on the number of new arrivals.

Taking into account funds the government has already agreed to provide, that means the states and municipalities will still need 3 billion to 5.5 billion euros in financing, Dedy said.

The association’s estimates are based on two scenarios with between 500,000 and 1.2 million refugees arriving next year.

“The challenge is noticeable everywhere - from providing accommodation and on the housing market to schools, in daycare centres and in healthcare,” said Stephan Articus, managing director of the Association of German Cities.

He said the federal states therefore needed to pass the approved federal funds for accommodating and providing for refugees on to municipalities in full because until now the states’ involvement in financing the communities had been “extremely varied”.

The federal government has already agreed to set aside 5 billion euros in windfall income from this year’s budget to help finance the states and municipalities in 2016. The government in Berlin pays the 16 federal states 670 euros each month for every asylum seeker they take in.

The Association of German Cities said the aid from the federal budget helped to reduce the burden on the states “but federal funds alone of course don’t cover the municipalities’ costs”.

The association also urged the federal government and states to make a significant contribution to the cost of integrating migrants who are granted asylum.

Reporting by Klaus Lauer; Writing by Michelle Martin; Editing by Hugh Lawson

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