Germany urges strict budget policy to cope with refugees

Nearly 1.1 million asylum seekers arrived in Germany in 2015 (AFP Photo/Andreas Gebert)

Nearly 1.1 million asylum seekers arrived in Germany in 2015

Nearly 1.1 million asylum seekers arrived in Germany in 2015 (AFP Photo/Andreas Gebert)

Frankfurt (AFP) - Germany's top priority at the moment is taking in and integrating the huge influx of refugees, but that will require a very strict handling of the country's public finances, finance minister Wolfgang Schaeuble said in a newspaper interview Thursday.

"We don't know how many more refugees will come," Schaeuble told the regional daily Passauer Neue Presse.

"Taking in and integrating them and the costs of doing so have highest priority," he said.

"If at all possible, we aim to achieve this without taking up new debt. We're still in a position to be able to keep to the 'black zero'," or a balanced budget, Schaeuble said.

"But that means we will have to be very strict on spending. We will no longer be able to afford everything. That is clear."

Germany clocked up a public budget surplus in 2015, the second year in a row that its state finances have been firmly in the black.

And as finance minister, Schaeuble has come to personify the principle of budget austerity.

But he insisted that Germany was not merely "harping on about the principle of a balanced budget" for the sake of it.

"The 'black zero' is not a dogma, but a sensible fiscal policy which benefits people" in real terms, Schaeuble said.

Nearly 1.1 million asylum seekers arrived in Germany in 2015.

Experts believe the newcomers will be positive to the German economy, if not the government's balance sheet, in the short term because they will boost domestic demand.

However they say the long-term economic consequences depend on how quickly and effectively the refugees are integrated into the labour market.