The rising cost of looking after refugees may scupper the budget plans of some European governments, and Brussels should consider exemptions for such spending under its EU deficit rules, Austria’s finance minister was quoted as saying yesterday.
“The short-term costs are high but predictable. More critical is the question of the longer-term effects on the budgets,” Hans Joerg Schelling told German newspaper Welt am Sonntag, in an interview published yesterday.
He said a lot of refugees would stay in Europe, which meant governments had to build more houses and schools. “I have my doubts that the budgets that are being planned now will be sufficient,” the minister said. Some economists argue that the increased number of refugees will lead to stronger domestic demand, and therefore higher tax revenue.
The minister said the European Commission should think about not counting such spending as normal expenditure under its deficit rules.
“There should be a discussion about whether the high costs for countries such as Germany or Austria and others for the humanitarian measures should be viewed as extraordinary one-time effects,” Schelling said.
German Finance Minister Wolfgang Schaeuble has said he still aimed to maintain a balanced budget this year and next. Some lawmakers have questioned whether that will be possible given the rising costs associated with the migrant crisis.
Refugee costs may scupper budget plans of some EU governments
Chancellor Angela Merkel’s chief of staff ruled out Berlin raising taxes to cover refugee costs.
“We’ve promised the voters that there won’t be tax increases or other levies. We’ll keep that promise,” Peter Altmaier told Der Tagesspiegel in an interview published yesterday.
Meanwhile seventeen migrants drowned when their boat sank yesterday off the Turkish coast while headed for the Greek island of Kos, the Anadolu Agency reported.
The boat was carrying 37 people, 20 of whom were rescued, when it sank in the Aegean Sea, Anadolu said, citing local governor Amir Cicek.
The boat had set off from the coastal village of Gumusluk and all those on board had been accounted for, Anadolu said. The area is part of the larger Bodrum peninsula, a popular tourist destination where this summer the body of drowned toddler Aylan Kurdi washed up, sparking international outrage.
A record 300,000 or more Syrians and other migrants have arrived in Greece, mostly setting off from Turkey’s Aegean coast. While Kos is just 4 km from Bodrum at its closest, the journey is perilous, as migrants often cram into rubber dinghies captained by men with little or no seafaring experience.
The coastguard has rescued more than 53,000 migrants, but 274 have died in Turkish waters, Deputy Prime Minister Numan Kurtulmus has said.