States are on a confrontational course with the federal government

Berlin Shortly before the refugee summit in the Chancellery, the 16 federal states agreed on their own concept for future refugee financing. In it they call for a per capita billing system for incoming people seeking protection. This emerges from the draft of a draft resolution by the heads of the state and senate chanceries for the meeting of the prime ministers with Chancellor Olaf Scholz on Wednesday in the chancellery, which is available to the Handelsblatt.

The states are thus on a confrontational course with the federal government, which has already rejected a per capita flat rate for accounting for refugee costs, pointing out that there is no scope for further aid in the federal budget. Her main argument: the states and municipalities are doing better overall financially than the federal government.

In the paper sent to the Federal Chancellery, the heads of government of the federal states make it clear that the migration movements of recent years are a “permanent development” and that the federal states and municipalities need “more planning security” in view of the major challenges. Therefore, it requires “a financing model that is appropriate in terms of amount and adapts to changing refugee numbers (breathing system)”, according to the draft approved on Monday evening.

Specifically, the prime ministers are in favor of a return to the so-called four-pillar model, which was in place until the end of 2021. The federal states are therefore demanding a general monthly per capita flat rate for accommodation and care under the Asylum Seekers Benefits Act. They do not name a specific amount. However, a lump sum of around 1000 euros was mentioned in a paper from the finance ministers’ conference on Sunday.

In addition, the federal government should bear the full reimbursement of costs for accommodation and heating for refugees and contribute more to the costs for the integration of all refugees and for unaccompanied minors. According to the state paper, the 2.75 billion euros promised by the federal government in November 2022 for refugees from Ukraine and refugees from other countries would not do justice to the increasing number of refugees.

Wirtschaftswiser Truger advocates a per capita flat rate

The heads of government justify their demands with the number of people seeking protection from countries other than Ukraine, which have increased by around 50 percent since 2019 – the last year before the corona pandemic. The people currently seeking refuge are not only from Ukraine, but increasingly from other third countries. “In the first four months of 2023, initial asylum applications increased by 78.4 percent compared to the same period last year,” state the states.

>> Read also: Hesse’s Prime Minister calls for a per capita billing system for refugee costs

Irrespective of this, government spokesman Steffen Hebestreit emphasized on Monday in Berlin that the federal government already bears a considerable part of the costs for taking in refugees in Germany. “It is true that the municipalities are facing financial challenges,” said Hebestreit. However, the federal states are responsible for their financial situation, direct financial relationships between the federal government and the municipalities are not legally provided for. “In this respect, the federal government can only help to a limited extent.”

Green Party leader Ricarda Lang sided with the states and local authorities and expressed the hope that the government would not want to let anyone down. In the end, it will “probably also involve a financial contribution from the federal government”.

The co-spokesman for the SPD-Left, Sebastian Roloff, on the other hand, explained that it must be checked regularly whether additional support for the municipalities is necessary. “But after years of increased funding by the federal government, I now see the federal states as having a special responsibility,” said the member of the Bundestag to the Handelsblatt. “The federal states had largely recorded budget surpluses.” The FDP politician Stephan Thomae made a similar statement.

“The accommodation of refugees, also in terms of financing, is actually the task of the federal states and municipalities,” Thomae told the Handelsblatt. “Therefore, the states are obliged to make their contribution, especially since their tax revenues have developed significantly better than that of the federal government.” Thomae reminded that the federal government will provide a total of 26.65 billion euros for refugees in 2023, of which 12, 29 billion euros are earmarked to relieve states and municipalities. “Now it must be ensured that the money gets to where it is needed quickly.”

The economist Achim Truger, meanwhile, supports the demand for a per capita flat rate for refugee financing. “It doesn’t help to calculate how much the federal government is already paying, because it’s about whether the payments are appropriate now and in the future or not,” Truger told the Handelsblatt. “Flat rates per refugee would probably make sense, because then it would not have to be renegotiated again and again in the future.”

DIW boss Fratzscher criticizes “unworthy bargaining” for money

Truger finds it unconvincing that the federal government is pointing out its difficult budget situation. Because the financial bottlenecks in the federal budget resulted from the fact that the federal government had performed its “stabilization task” in the crises. “In addition, the tense budgetary situation was deliberately brought about politically by returning to the standard limit of the debt brake as early as 2023 and even overcompensating for the cold progression,” explained the economist. “In doing so, the federal government has robbed itself of important leeway that would have been necessary for a gradual exit from the crisis policy.”

The President of the German Institute for Economic Research (DIW), Marcel Fratzscher, spoke of an “unworthy haggling” on the backs of all citizens in the municipalities with regard to the federal-state dispute. A solution must now be found urgently, the summit must not fail.


“In the short term, the federal and state governments should share the costs of caring for and integrating the refugees, with the federal government shouldering most of the burden because it has more opportunities to finance the additional costs through tax increases,” Fratzscher told Handelsblatt.

As justification, he pointed out that for many municipalities, the financial emergency caused by the pandemic and the energy crisis had worsened and that it was becoming increasingly difficult for them to fulfill their task of providing services of general interest. “The financial distress of the municipalities will continue to worsen due to inflation and significant wage increases in the public sector,” says Fratzscher. Therefore, a reform of the state financial equalization system is also necessary with the aim of providing municipalities with better financial resources in the long term.

CDU calls for social benefits to be reduced to European level

Also in the run-up to the refugee summit, Baden-Württemberg’s CDU parliamentary group leader, Manuel Hagel, started a discussion about the amount of social benefits for refugees. They must be lowered to a common European level, he said. There should no longer be a “German special path”, but the federal government must coordinate the level of social benefits with neighboring European countries, Hagel explained in a position paper that was available to the German Press Agency. The SWR had previously reported on it.

That would mean that Ukrainian refugees in Germany would also get less money. Above all, the services also attract refugees who have already found accommodation in other European countries, explained Hagel. It is urgent to “reduce the cash benefits and bring them up to the European level”.

The CDU parliamentary group is also calling for tougher action to be taken against illegal entries from Switzerland. “Especially at the Swiss border, we demand temporary border controls,” said a five-point paper on refugee policy. The prime ministers’ conference must bring the traffic light government in Berlin to “far-reaching course corrections”. Other demands by the CDU parliamentary group in the state parliament include deporting rejected asylum seekers more quickly and declaring the North African states of Algeria, Morocco and Tunisia as well as Georgia to be safe countries of origin.

More: The federal government is spending 27 billion euros on the refugee crisis this year

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