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27 January 2017

Asy­lum and refugee pol­i­cy: the role of the fed­er­al bud­get

  • Immigration numbers reached a historic high in 2015, but this trend did not continue. The number of new arrivals has fallen sharply since the beginning of 2016 and has remained at a low monthly level.
  • Additional federal budget funds have been allocated to all levels of government since 2015 on the basis of actual needs. These amounted to approximately 21.7bn in 2016 alone.
  • The German government has optimised the asylum procedure by updating its decision-making processes, administrative structures and IT systems.

1 Introduction

The key factors that led to a global rise in irregular migration and refugee flows in 2014 and 2015 included political instability in the Middle East and in parts of Africa; supply shortages in reception facilities in Syria’s neighbouring countries, including reduced food rations in the large refugee camps of the UN refugee agency UNHCR; and difficult living conditions.

According to current information, approximately 890,000 asylum seekers1 came to Germany in 2015, with a sharp increase starting in the summer months. The substantial discrepancy between the number of formal asylum applications and the significantly higher number of arrivals recorded by the IT system EASY was already noticeable in the early summer of 2015. EASY registers refugees anonymously so that they can be relocated evenly across the German Länder immediately upon their arrival in Germany. The surge in numbers meant that the Federal Office for Migration and Refugees (BAMF) did not have sufficient staff or IT capabilities to record and process the actual number of asylum applications. EASY was therefore the only tool available for measuring the number of new arrivals.

Alongside the German armed forces, a large number of volunteers gave their all to help authorities provide initial care to the refugees. The federal government, Länder and local authorities were not prepared for immigration on this scale within such a short period of time. For historical reasons, Germany’s asylum procedure has evolved into a complex federal administrative system with multiple key players over the course of recent decades. It became clear that cooperation and IT procedures in particular were in need of improvement.

2 Managing the refugee situation: a general government responsibility

The special challenges arising from the refugee crisis in 2015 and 2016 were dealt with at the general government level. Germany’s federal system requires all levels of government to face up to their responsibilities. The federal government made considerable efforts in the areas for which it is responsible – fighting the causes of refugee flows on the ground, providing a basic allowance for jobseekers, and offering the integration services that fall under its remit.

Under the German constitution (Basic Law), however, the organisation surrounding the arrival of asylum seekers and providing care for them – and, by extension, funding these efforts – is fundamentally the responsibility of the Länder. Housing, relocating and providing for asylum seekers and caring for unaccompanied minors fall under the competence of the Länder and local authorities. Wherever possible, the Federation has provided the other government levels with administrative assistance in fulfilling these tasks.

Table 1: Authorities involved
Authorities in Germany:Responsible for:
Federal Ministry of the InteriorOverarching coordination of refugee policy, supreme authority superordinate to BAMF
Federal Office for Migration and Refugees (BAMF)Asylum procedure and integration measures
Federal PoliceSecuring Germany’s borders

Länder

Registering, housing and providing for asylum seekers (usually in initial reception facilities)
Foreigners authorityEnforcement of provisions relating to foreign citizens
Land PoliceSecurity in Germany (sovereignty in police matters)
Local authoritiesHousing and providing for asylum seekers; primary responsibility for social integration at the local level
Federal Employment AgencyAdvising asylum seekers and placing them in employment or training (while the asylum procedure is pending)
Job centresLabour market integration of asylum seekers who have been recognised as being in need of protection
Source: Federal Ministry of Finance

In addition, the Federation has taken on financial responsibility and provided substantial financial relief to the Länder and local authorities. It has become clear that the constitutional legal framework imposes certain limits on a needs-based, Länder-specific financial contribution by the Federation to the refugee-related costs of the Länder and local authorities. To the extent that this financial support takes the form of additional VAT revenue (fixed VAT amount), the VAT is distributed among the Länder according to population numbers. In this context, it is not possible to provide financial support that is more closely tailored to the actual costs incurred by individual Länder.

A Federation/Länder coordination group was instituted under the leadership of the Federal Ministry of the Interior in the summer of 2015. It discusses the refugee situation, addresses problems, and provides a forum for coordination between the Federation and the Länder. The coordination group acts as an interface between all parties involved and has streamlined communication significantly. A steering committee for managing the refugee situation took up its work in late August 2015, also under the operational coordination of the Federal Ministry of the Interior. It brings together state secretaries from all the federal ministries involved. Following a cabinet decision of early October 2015, the federal government has implemented its plan for coordinating the refugee situation, with the Federal Chancellery responsible for general policy coordination. Each of the ministries affected has nominated a commissioner for this coordination work so that assignments and decisions can be implemented quickly. In the Finance Ministry, this role is fulfilled by the head of directorate responsible for the departmental budgets of the Federal Ministry of the Interior and the ministries dealing with social issues in the wider sense. In addition, a coordinating office for refugee-related issues was established within the Finance Ministry. It supports the commissioner, and pools and coordinates the Ministry’s refugee-related responsibilities. For example, the coordination office calculates the financial relief provided by the Federation to the Länder and local authorities to cover part of their expenditures under the Asylum Seekers Benefits Act, in accordance with the agreements reached between the Conference of Minister-Presidents and the Federal Chancellor (ex-post accounting).

3 Situation in Germany at the end of 2016

Given that coordinating the refugee situation is a general government responsibility, the groundwork was laid at an early stage.

3.1 Funding the response to the refugee crisis

2015 supplementary budgets and 2016 federal budget

While asylum-related issues are essentially the responsibility of the Länder, the Länder started receiving financial support from the Federation as early as 2015.

The federal government and parliament responded to the new situation by adopting two supplementary budgets in 2015. The block grant of €500m that was allocated to the Länder and local authorities at the beginning of 2015 to help them cover part of the refugee-related costs was subsequently increased to a total of €2bn. In addition, a total of 1,130 new positions were budgeted for in response to the refugee situation, almost all of them within the wider responsibility of the Federal Ministry of the Interior, including the Federal Office for Migration and Refugees (BAMF). BAMF’s IT infrastructure was modernised, as well. Almost 30 new positions were created in German consulates, mainly in the region around Syria, and additional local staff were hired. In autumn 2015, an additional €25m was made available for integration courses, and the provision of free administrative assistance by federal authorities to Land authorities was introduced. The Federal Ministry of Finance put up to 470 customs officials at the disposal of BAMF and the Federal Police over a period of more than one year to help them with the initial registration of people seeking protection. The customs officials also helped BAMF and the Federal Police secure the borders and process asylum applications. In addition, starting on 1 January 2015, properties of the Federal Institute for Real Estate (BImA) were made available rent-free through unbureaucratic channels to provide accommodation for asylum seekers and refugees. BImA reimburses the Länder and local authorities for the renovation and development of these properties against proof of expenditure. Not least, the Federation offered comprehensive support in providing health care to refugees, for example by issuing recommendations for performing initial medical examinations and drafting a plan for vaccinating asylum seekers soon after their arrival in Germany.

The 2016 budget made provision for further measures, as well. For example, an additional €1.9bn was provided for benefits as set out in the Second Book of the Social Security Code (for recognised refugees) and to cover employment-related German language classes. Additional resources amounting to €900m were earmarked for the Federal Ministry of the Interior and its subordinate authorities. This included an extra €250m for integration courses, an additional €250 for staffing costs at BAMF, and approximately €100m for the IT measures necessary for improving registration and processing. The Federal Police received an additional €200m. Providing properties rent-free and covering the associated renovation expenses cost the Federation more than €300m in lost revenue.

At the end of the 2015 fiscal year, the extra financial leeway created thanks to successful budget execution was used to build a reserve for additional refugee-related expenditures, such as ensuring that the relief agreed upon with the Länder could continue to be funded in subsequent years.

At the meetings of the Minister-Presidents and the Federal Chancellor in June and September 2015, it was agreed that the Federation’s involvement in the Länder’s refugee-related costs from 2016 onwards would be sustained, flexible, and structural in nature. These agreements were taken into account when preparing the 2016 federal budget, which provided that the Federation would reimburse the Länder €670 per refugee and month during the asylum procedure, initially in the form of an advance payment of nearly €3bn. The funds allocated by the Federation to the Länder and local authorities also included €350m for the care of unaccompanied refugee minors and €339m for the improvement of childcare. The compensatory funding provided to the Länder following the discontinuation of federal financial assistance to promote social housing was increased by €500m. The Länder agreed to use these funds specifically for social housing.

The 2016 personnel budget was also increased. Almost 4,900 new positions were approved, including 3,000 to process asylum applications, 1,500 in the Federal Police for tasks such as securing the borders, and the remainder for other federal ministries that have responsibilities related to the current refugee situation.

In addition, spending to fight the root causes leading people to flee their countries was increased considerably in 2016. Germany’s spending on humanitarian aid stood at €1.4bn in 2016, almost triple the 2015 figure. In total, about €7bn was made available for measures related to large numbers of people fleeing their home countries or migrating.

European and international agreements to combat the root causes of refugee flows

At the European level

Two EU Council Decisions made in September 2015 require Germany to move people in need of protection out of Italy and Greece. In 2016, 1,099 people were resettled from Greece and Italy to Germany.

In addition, EU member states can contribute to the resettlement of people in need of protection on a voluntary basis. Germany offers resettlement primarily to Syrian refugees who have fled to Turkey. So far, 1,060 third country nationals have been relocated to Germany. In addition to the EU-Turkey Deal, another 155 refugees have been taken in, most of them Syrian nationals arriving from Lebanon.

EU-Turkey agreement

At the EU-Turkey summit on 29 November 2015, Turkey and the EU decided to create a €3bn facility to support Turkey financially. Germany will be contributing a total of €428m on a bilateral basis by 2019. The funding will go to projects and organisations that support refugees in Turkey and their Turkish host communities. With the EU-Turkey Statement of 18 March 2016, an important step was made towards combating human smuggling and facilitating legal entry into Europe. The “1:1 mechanism” stipulates that all refugees arriving on the Greek islands from Turkey from 20 March 2016 onwards will be returned to Turkey. For every Syrian who is returned to Turkey from the Greek islands, another Syrian will be resettled from Turkey to an EU member state.

International measures

In 2016, the German government spent approximately €7bn worldwide on measures addressing refugee and migrant flows. The measures are aimed in particular at reducing the immediate and structural causes of refugee flows and at improving protection for refugees living in major reception and transit countries. Germany co-organised the Supporting Syria conference in London, which resulted in commitments from the international community to provide US$12bn in order to improve the prospects of people in the region. With a pledge of €2.3bn, Germany made the largest bilateral contribution, and has already paid out its share for 2016 in full.

In 2016, creating comprehensive electronic records for refugees upon registration in Germany was a major challenge. Comprehensive records were, and still are, the prerequisite for the ex-post accounting agreed with the Länder. In order to create electronic records and introduce proof of arrival cards, the competent authorities needed special technology and equipment. Thus the Federation provided over 1,700 terminals for processing proof of arrival cards and finger print scanners; by early summer 2016, all new arrivals were being issued with proof of arrival cards.

In 2016, discussions were opened with the Länder about measures to ensure the many refugees would benefit from a quick, effective, and smooth integration process. Over the course of the year, these discussions evolved into an overall strategy by the German government designed to ensure refugees have access to language learning and integration measures. At the same time, the Federation promised the Länder and the local authorities financial support worth several billions of euros, and local authorities are now receiving full refunds from the Federation for the housing and heating costs incurred for recognised refugees during the 2016-2018 period; these refunds are paid out as part of the basic income support for job-seekers. The additional expenditures in the federal budget are expected to amount to a total of €2.6bn. Furthermore, the Länder will be receiving an annual block grant of €2bn for integration purposes each year between 2016 and 2018. They will also be receiving additional funding for social housing with payments of €500m in both 2017 and 2018 thanks to a further increase in the “unbundling” funds paid out by the Federation to the Länder to back projects that were previously financed jointly.

Financial support for the Länder under the Asylum Seekers Benefits Act

The Asylum Seekers Benefits Act (Asylbewerberleistungsgesetz) provides for substantial support for the Länder and the local authorities in covering actual costs: It stipulates that the Federation make a structural, sustained, and flexible contribution to general government costs. The scope of financial support is determined by the number of asylum seekers and refugees accepted, and was settled in the decisions reached by the Minister-Presidents of the Länder and the Chancellor in June and September 2015. Expenditures under the Asylum Seekers Benefits Act are still the responsibility of the Länder and the local authorities.

In the autumn of 2016, the first ex-post accounting adjustment was carried out for the January-August 2016 period. The aim of this adjustment was to assess and adjust the advance payment of just under €3bn that had previously been paid out to the Länder for 2016. The calculations resulted in a back payment of just under €760m by the Federation. Another advance payment of approximately €1.8bn was agreed for the September-December 2016 period. In total, the Länder and local authorities received €5.5bn from the Federation last year to support them with their expenditures, as set out in the Asylum Seekers Benefits Act. In 2017, the Länder will be receiving an advance payment of €1.16bn.

The 2017 Federal Budget

The Federation continued to contribute financially to the federal budget in 2017. While approximately €21.7bn were earmarked for asylum-related expenditures in 2016, expenditures are expected to amount to approximately €21.3bn in 2017 (see Table 2). But, to quote what German Finance Minister Wolfgang Schäuble said in the late summer of 2015, money’s not the issue here.

Table 2: Contributions by the Federation
Contributions by the Federation in response to the flow of asylum seekers in billions of euros2016 estimate2017 projection
Combating the root causes of refugee flows7.17.2
Arrival procedure, registration, housing during asylum procedure1.41.3
Contribution to integration measures2.13.2
Social transfers after asylum procedures1.72.7
Direct financial support for Länder/local authorities9.36.9
Total asylum-related contribution from the federal budget21.721.3
Owing to rounding, figures may not add up.
Source: Federal Ministry of Finance.

3.2 Responding to the influx of refugees: adjustments to the law

Just as the federal budget was quickly adapted to deal with the refugee crisis, the legal framework was also soon adjusted. Legal amendments updated Germany’s asylum and refugee policy to respond to the new challenges (for details, please see the overview of new legislation in the German version of the January 2017 monthly report). On the one hand, the asylum procedure was simplified, shortened, and digitised. This included extending the list of safe countries of origin, which contributed to speeding up asylum procedures, as anticipated. On the other hand, the rights and obligations of those seeking protection in Germany were clearly defined.

With the Integration Act (Integrationsgesetz), and the ordinance passed with it in the summer of 2016, the German government established that the principle of “Challenge and Support” applied to refugees, too: The broadening of integration courses to include new groups, new measures to help refugees integrate, and improved training and job opportunities have made it easier for newcomers to become fully-fledged members of German society. At the same time, the law also stipulates that those seeking protection in Germany have certain duties. For example, applicants are required to have their habitual place of abode in the Land in which the asylum procedure was carried out. Integration must be understood as an invitation as much as a duty for newcomers to strive to become part of German society by their own efforts. Thanks to the Integration Act, Germany has a legal basis for the integration of non-Germans for the first time in its history.

4 Outlook

After the challenges of 2015, Germany was able to introduce a number of measures that were backed by solid financing in 2016, thus creating new structures to deal with the influx of refugees. The developments of 2015 need to remain an exception. The following keywords describe future challenges for German asylum and refugee policy:

Combating the causes of refugee flows and controlling immigration at the European level

Germany’s European, foreign, and development policy places a special emphasis on combating the root causes that make people flee their home countries and regions. Immediate and structural causes need to be reduced, and measures to combat human smuggling need to be expanded.

At the European level, the common European asylum system is currently undergoing thorough reform in an effort to create a responsive and crisis-proof asylum system that covers the entire EU.

Long-term social integration

Academic studies, such as a study by the Institute for Employment Research (IAB), show that integration must be understood as a long-term process.2 Integration as a long-term task implies that there is a whole range of levels at which the Federation can provide support, from language teaching and measures to promote social integration, to vocational training, employment, education, and higher education. This includes basic training to learn our language and our values, which is provided, for example, by the integration courses offered and by the socio-political measures taken to include newcomers in vocational training and employment. With this in mind, the German government is developing an overall strategy to promote language learning and integration. Furthermore, an interdepartmental working group has been set up. The working group will primarily be discussing future plans and projects, and will also serve as a space to present and analyse salient findings.

Using the allotted budget effectively and efficiently

The fallout from the exceptional year that was 2015 can be dealt with quickly, both in organisational and in administrative terms.

Yet the Federation must not lose sight of efficiency out of a desire to act quickly, or because it has acted quickly in the past. For this reason, the individual measures already taken need to be tied in more closely with the German government’s overall strategy. Measures must be goal-oriented and tailored to achieve their intended effects so as to reduce overlap, and so that funds can be channelled to where they can help achieve the greatest results. For example, the declining number of incoming refugees means that some of the available housing is no longer needed at the moment, and the situation should be reviewed accordingly.

Repatriation and voluntary returns

The current flow of refugees has placed Germany before the challenge of integrating hundreds of thousands of newcomers into German society. Meeting this challenge will only be possible, and accepted within the wider society, if Germany concentrates on those refugees who have good prospects of permanent residence in this country. For this reason, all those who arrived recently, but who are not deemed in need of protection, must return to their home countries as quickly as possible. This requires clear agreements with the countries of origin.

The vast majority of those who are required to leave Germany return to their countries voluntarily, and the Federation has a range of programmes to encourage voluntary returns. It is expected that the Federation will spend a total of approximately €23m on returns in 2016. In 2017, approximately €64m will be made available so that the programme for promoting voluntary returns can be extended and this way of leaving Germany is specifically encouraged.

5 Conclusion

During 2016 and 2017, the Federation provided approximately €43bn in a successful effort to surmount the challenges faced by the state as a whole. The Federation has been providing the Länder with sustained, flexible, and structural support. Germany has been moving in the right direction since the end of 2016. While immigration numbers peaked in 2015, the trend did not continue. Since early 2016, the number of new arrivals has fallen significantly and has remained at a low level: an estimated 280,000 asylum-seekers arrived in Germany in 2016.

By the end of 2016, the Federation had readied substantial funds and updated its decision-making processes, its administrative structures and its IT systems. Only one year after the onset of the influx of refugees, then, the administrative structures have been significantly improved. People seeking protection here have also benefited from a number of improvements: The backlog of pending asylum procedures was reduced by a quarter compared to the peak level, all people seeking protection now have a record, newly arriving refugees can submit their asylum application immediately, and those whose application procedures are still ongoing can also enrol in integration courses. In the meantime, the Federation has provided comprehensive financial relief for the Länder and the local authorities.

Footnotes

1
Note: While public perception often places the number of refugees arriving in 2015 at 1.1 million, this figure was taken from the annual total of registrations in the EASY system. This anonymised IT system allows for double entries and erroneous entries, and produced inflated figures for refugee numbers in late 2015. At the time, other identification systems were not suited to coping with the large number of refugees and had not yet been digitised.
2
According to the IAB-SOEP Migration Sample, an average of just under 50% of asylum-seekers and refugees between the ages of 15 and 64 were in employment five years after their arrival in Germany. The employment rate reaches 60% after ten years, and 70% after 15 years of living in Germany.

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