Germany to halve federal aid for refugees next year

Germany plans to halve the federal aid allocated for states to cover the expenses of receiving and integrating refugees next year, the finance ministry said on Tuesday, as part of belt-tightening amid soaring inflation and economic slowdown.

More than 1 million Ukrainians sought refuge in Germany after Moscow's invasion in February 2022, and the number of refugees from other countries jumped by around 50% in 2022 compared with 2019, data from the Federal Office for Migration and Refugees (Bamf) showed.

For years following the 2015-16 refugee influx, when more than a million refugees arrived in Germany fleeing war and prosecution in the Middle East, Berlin had provided the states with a monthly per capita flat rate based on the number of refugees and took care of accommodation and integration costs.

But with a drop in incoming refugees in recent years, the country's 16 states pushed Berlin to earmark a fixed amount for refugees' expenses regardless of their number, changing the financing policy in 2021.

Russia's invasion of Ukraine pushed Berlin to spend around 28 billion euros on receiving refugees and tackling the root causes that drive people to flee, of which more than 15 billion euros went to states and municipalities.

But in light of a gap of 20 billion euros in next year's federal budget and the fact that Ukrainians have direct access to the national welfare system, Berlin plans to cut the states' earmarked refugee money.

The government will halt its contribution to the costs of caring for and integrating the 1.08 million Ukrainian refugees as well, a government source told Reuters on Monday.

The federal government will cut refugee costs to 1.25 billion euros for the years from 2024, from 3.75 billion euros this year, a spokesperson for the finance ministry said.

"We emphasize again that the states must provide their municipalities with the necessary financial resources," the spokesperson said, adding that a meeting of the federal and states' governments on Monday failed to reach agreement ahead of a planned consultation with Chancellor Olaf Scholz in November.

States say more funding is still needed to cover other indirect expenses such as schooling for refugee children.