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Germany's Economy Will Benefit From the Migrant Influx

?While politicians are warning that Germany’s welcoming atmosphere towards refugees is changing, economists agree that around 1 million migrants coming into the country this year can only be good financially.
Photo by Bodo Marks/EPA

Some politicians have warned that Germany's welcoming atmosphere of flüchtlingseuphorie — or "euphoria for refugees" — has started to wane this week. On the flip side, many economists agree that an influx of up to 1 million migrants this year can only be good for the country financially.

On Thursday, Germany's top migrant official Manfred Schmidt resigned for "personal reasons," but others speculated that one of his office's tweets, seen as opening the country's doors to Syrian migrants, might also have played a role.


Schmidt's exit comes amid Europe's largest refugee crisis since World War II and after Germany welcomed thousands of people earlier in the month some believe that the mood is now changing.

Politicians on both left and right criticized the government's open door policy before it reinstated border controls after a record influx last weekend, when around 13,000 people entered the southern city of Munich on Saturday alone.

A poll for German newspaper Bild this week showed on Tuesday that the support for the right-wing Alternative for Germany (AFD) party has risen to its highest level in nearly four months. AFD began as a euro-skeptic organization, but shifted its focus to immigration in July.

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"People are feeling overwhelmed by foreigners, they fear to lose their heimat," AFD founding member Alexander Gauland told VICE News. Heimat is tough to translate but it refers to a spiritual attachment to home, and Gauland predicts this "uncontrolled influx of refugees" will change Germany's social climate.

Yet not everyone is so concerned. "This is the third refugee wave Germany is experiencing: Over 20 million refugees after World War II, over 2 million Aussiedler [returning migrants from a German background] from Eastern Europe, and now around 1 million in the near future who want to become citizens," Horst Opaschowski, a well-known German futurologist, told VICE News. "The Germans will get used to this situation."


In terms of the initial economics, the biggest burden will be borne by the German states and municipalities. The refugees are allocated among the 16 federal states according to population and economic strength. In turn, those states are responsible for the distribution of new arrivals to cities and municipalities, and paying for food, housing, language education, and medical treatment.

Yet the economy offers a bright spot for refugees and the country taking them in, especially as Germany has an aging population and a low birth rate, "The refugee crisis has a double economic effect: First, it costs money, but on the long term it will save money. The refugee crisis has the ability to become the future potential of Germany if integration is successful," Opaschowski added.

Leading economists also agree that Germany will profit from the influx of refugees. A study published on Thursday estimates that the German economy will get a significant growth boost over the next few years, as reported by the Independent. The research, released by Oxford Economics, states that an increase of a million people over the next three years would improve the country's GDP by 0.6 per cent by 2020.

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In the mid- and long-term, the high number of young migrants will even relieve the country's social security system, as predicted by the RWI Essen, an economic research institute, in its fall 2015 forecast. According to this forecast, however, the precondition is that the migrants are able to get a job.


An optimistic tone was also struck by a number of German industry leaders. With unemployment at 6.4 percent, the economy is already looking toward a workforce of refugees.

On Tuesday at the Frankfurt motor show, Dieter Zetsche, the CEO of motor giant Daimler-Benz, stopped his speech about future cars and instead made a plea for the refugees entering Germany. Taking in more than 800,000 people "is undoubtedly a herculean task for Germany," Zetsche said, but added "in the best-case scenario, it can also be a foundation for the next German economic miracle — just like the millions of guest workers were for our economic miracle of the 50s and 60s."

Zetsche also referred to Silicon Valley in the US: "The ancestors of (Google founder) Sergey Brin, (Tesla founder) Elon Musk and (Yahoo founder) Jerry Yang didn't arrive in America on the Mayflower either." Daimler-Benz also recently announced that it would take steps to recruit new employees from among the incoming refugees.

Nobody can say if the number of 800.000 to 1 million migrants coming into Germany in 2015 will be revised upwards. "There is no forecast for the number of the expected asylum seekers in 2016," the Federal Office for Migration and Refugees told VICE News.

But as Opaschowski concluded: "It will only be in the long run that Germany can prove the pessimists wrong — and the economists right."

Follow Andrea Maurer on Twitter: @an_maurer