Germany Plans 2016 Balanced Budget Amid Rising Refugee Costs

  • 2015 surplus to be used next year for spending on migrants
  • Merkel promised to avoid new debt in last election campaign

Germany is planning a balanced budget for the second year in a row even as Europe’s biggest economy faces a record influx of people fleeing from war and poverty.

The parliament’s budget committee, after a 16-hour session that ended early Friday morning, approved a draft budget for 2016 that allows Chancellor Angela Merkel’s government to increase spending by 3.3 percent to 316.9 billion euros ($341.1 billion) without taking on new debt. To help pay for refugee-related costs, 6.1 billion euros in surplus revenue from 2015 will be shifted to next year.

“With the 2016 budget, the federal government does its financial responsibility in the refugee crisis justice,” Eckhardt Rehberg, budget policy spokesman for Merkel’s Christian Union bloc, said in an e-mailed statement.

Merkel promised voters before the 2013 federal election that won her a third term to keep spending in check and avoid new debt. Her ability to deliver on that pledge may depend on the number of migrants coming to Germany, which could reach around 1 million this year alone. The draft budget is based on the government’s official forecast of 800,000 refugees in 2015, said Johannes Kahrs -- budget committee lawmaker from junior coalition partner, the Social Democrats.

Uncertainty

“We hope that we can carry this through, but nobody knows that in the end,” Kahrs told reporters in Berlin regarding the budget plan. “Whether it turns out like that is something we’ll see when the accounts are settled.”

The committee awarded the Interior Ministry an extra 1 billion euros to help cover additional refugee-related costs. Funding for integration measures was raised by 293 million euros. The draft foresees 23.8 billion euros in interest expenses.

The lower house of parliament, the Bundestag, will vote on the draft later this month.

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