• Nation's top credit rating could be cut to BBB by 2040
  • Ability and willingness to integrate refugees key, report says

Even after taking in more than a million asylum seekers last year, Germany still may not have enough new workers to retain its top credit rating in future decades, according S&P Global Ratings.

QuickTake Europe's Refugee Crisis

Without new measures to address the nation’s aging population, the strain on public finances could prompt a lowering of the AAA ranking by eight levels to BBB by 2040, the rating company said in a report on Thursday. While the increase in population will provide temporary relief, integration and a sustained influx of well-qualified people are crucial to relieve long-term strains, S&P said.

“The immigration levels necessary to arrest the demographic and rating decline seem politically not feasible, which means that immigration is unlikely to be the silver bullet to solve Germany’s demographic problem,” S&P Global Ratings analyst Felix Winnekens wrote. “Its policy response to this demographic dilemma will likely be a key factor in our ratings considerations.”

The number of migrants accepted by Europe’s largest economy has put it at the center of the debate on immigration and helped prompt Chancellor Angela Merkel aid the European effort to staunch the flows. Public anxiety contributed to losses for Merkel’s party in three state elections in March as voters turned to the populist Alternative for Germany, which called for shuttering the nation’s borders and expulsions of refugees.

A shortage of relevant skills among immigrants is also proving problematic. Non-Europeans from asylum-seeking countries were the only group with rising joblessness in March, according to a report last month using non-seasonally adjusted data. The number out of work rose 79 percent from the prior year, even as Germans saw unemployment decline.

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