Angela Merkel, German chancellor, on Thursday rejected the proposal of a junior coalition partner to build transit zones on Germany's borders for processing refugees. Also on Thursday the European Commission said that the economic impact of the arrival of large numbers of asylum seekers in the EU will overall have a small impact on growth "but it can be more sizeable in some member states" such as Germany.

 

Germany's interior ministry Thursday published data from the federal migration agency (Bundesamt für Migration und Flüchtlinge: which show that there were 54,877 asylum applications in October, a 27% rise on September. There were 28, 462 Syrian applications followed by 4,680 from Albanians and 4,135 from Iraqis. The total arrivals amounted to 181,000 with 88,640 Syrians followed by 31,051 from Afghanistan and 21,875 from Iraq.

Arrivals in the 10 months Jan-Oct 2015 amounted to 758,000.

The leaders of Germany's governing coalition parties — Angela Merkel, leader of the Christian Democratic Union (CDU), Sigmar Gabriel, vice chancellor and leader of the left of centre Social Democrats (SPD), and Horst Seehofer, prime minister of Bavaria and leader of the CDU's conservative sister party, the Christian Social Union (CSU) — agreed on a new strategy to process refugees on Thursday, they said in a joint statement.

"We need to show that we are an open and a tolerant country, but also a country which respects its constitution," Angela Merkel told reporters.

Up to five registration centres for new arrivals will be established to speed up the processing of asylum applications. At least two of them are to be created in Bavaria, the southern German state, which is the main arrival point from Austria.

The focus is on economic migrants from the Balkans such as Albania and Kosovo, who would be required to stay in predetermined areas near the centres, reducing their chances of a successful application if they broke the residency rules. If the immigrants leave the area more than once, their asylum request would be automatically denied.

However there will be no guarded "transit zones" on the German border, which had been demanded by the CSU but opposed by Gabriel's Social Democrats.

The German government also plans to create a new refugee ID, which the migrants would need in order to place asylum requests and ask for state support. In addition, refugees would be asked to pay part of the expenses for the German courses provided upon entering the country.

Germany migrants, refugees 2013, 2015

Migrant and refugee arrivals in Germany 2013-2015

Siemens AG, the German industrial giant, said Thursday that it had donated €1m help with humanitarian assistance for the refugees.

Joe Kaeser, the CEO, told Germany’s Bild newspaper that the company was also making buildings and properties available in Bavaria, Berlin and North Rhine-Westphalia for housing migrants.

Siemens had already announced other efforts to help asylum-seekers, including providing qualified employees up to five days off per year to volunteer at refugee centres and a training program for newcomers.

The European Commission said Thursday that it expects about 3m asylum seekers to arrive in the European Union by 2017, boosting EU's economic output and even improving public finances in the longer-term if integrated into the workforce.

German GDP (gross domestic product) will be 0.43% higher next year and 0.56% higher in 2017 because of the influx of refugees. The positive effect would rise to 0.72% by 2020,

The commission estimates that overall migrant inflows will add additional regional growth of 0.2 to 0.3% of GDP by 2020.

Merkel, refugees, indispensable EuropeanWolfgang Schäuble, the German finance minister, said his country, which is bearing the brunt of the arrivals, was expected to incur refugee costs of €20bn, or around 0.6% of GDP, next year.

The figures are based on 800,000 people coming this year and 800,000 next year, with an unspecified number leaving because their asylum applications are rejected.

Schäuble will not change the zero-deficit target this year and next despite the additional spending pressures.

“In Germany, we are altogether in a position, as far as financial policies are concerned, to manage this extraordinary challenge [of the refugee crisis],” he said.

Overall, Euro Area real GDP is forecast to grow by 1.6% in 2015, rising to 1.8% in 2016 and 1.9% in 2017. For the EU as a whole, real GDP is expected to rise from 1.9% this year to 2.0% in 2016 and 2.1% in 2017.

The commission said "an annual average growth rate of 6% or higher" is expected in Ireland this year "but should be read with some caution given their typical volatility. The strong recovery, which was initially driven by net exports, is now firmly based on domestic demand across economic sectors. From 2016, GDP growth is set to converge towards more sustainable rates."

Valdis Dombrovskis, vice-president for the Euro and Social Dialogue, commented:

Growth is largely backed by temporary factors such as low oil prices, a weaker euro exchange rate and the ECB's accommodative monetary policy. The euro area has shown resilience to external developments, such as the slowdown in world trade, and this is encouraging. Sustaining and strengthening the recovery requires taking advantage of these temporary tailwinds to pursue responsible public finances, boost investment and carry out structural reforms to enhance competitiveness. This is important, particularly against the backdrop of a slowing global economy, continuing tensions in our neighbourhood and the need to manage the refugee crisis decisively and collectively.

European Commission forecasts

Pic above from Frontex, the EU border agency: Joint Operation Triton 2015 - Search and Rescue by Belgian navy in the Mediterranean Sea

Merkel refugee crisis Europe

Autumn colours at the Federal Chancellery in Berlin Photo: Bundesregierung information service