Complex refugee costs in Germany

Housing, food, supplies, a personal monetary allowance, policing, education, childcare - there's a long list of potential costs when a country takes in refugees or asylum seekers. To complicate matters further, these costs will vary from person to person, and place to place. Cities such as Munich or Stuttgart, two of the German property ladder's priciest rungs, might have particular problems finding affordable accommodation. In former East Germany or northwestern cities struggling to overcome the decline of heavy industries such as mining, integrating migrants into the labor market or schools might pose the greatest problem.

Despite these potential discrepancies, the federal government has agreed on a new, unified approach to the funding issue starting in 2016. It was a key part of the package of asylum laws passed on a fast track this month. Starting in January, the national government will award each of Germany's states a fixed sum of money - 670 euros (currently $740) - per asylum seeker, per month. It will then be up to the states and to their municipalities to divvy up this money to cover their specific costs.

"The risk here is self-evident," warns a new report from the Deutscher Städtetag (Organization of German Cities), which represents municipal governments in Germany's highly decentralized system. "The agreement completely neglects to obligate German state governments to pass these means on to the municipalities."

Who pays what, where?

Stephan Articus, managing director of the Deutscher Städtetag, suggests a "transparent, unified and national process" to solve this, in which states simply pass the entire premium they receive straight on to the municipality or city where the person is living. "For, up to now, different states' financial contributions towards the costs for municipalities have differed vastly."

In principle, German states are legally responsible for the reception, accommodation and provision of benefits to cover the vital needs of asylum seekers. In practice - with exceptions such as Bavaria and the city-states of Berlin, Bremen and Hamburg - most states pass this responsibility on and then reimburse local governments for the costs incurred. As a 2014 federal government report from the Federal Office for Migration and Refugees (BAMF) put it: "It is, however, virtually impossible to compare these [state figures] with one another because of different accounting periods and different variable shares." Most states, the report continued, were aiming to shoulder between 70 and 85 percent of the municipalities' costs at the time.

Articus' second-in charge at the Deutscher Städtetag, Helmut Dedy, wrote an editorial to accompany Thursday's report, playing on Angela Merkel's now-notorious "wir schaffen das" ("we can do this") refugee motto. Entitled "We can do this, if…," Dedy's thesis points out that Germany is essentially in stage one of three when it comes to refugees: reception. Stages two and three, "beginning with the approval of the refugees' asylum applications," will pose challenges on the local level more than for states, he posits. After identifying integration in the community, which "also requires financial resources," as stage two, Dedy comes to the third step: "Refugees - just like other residents - need a flat, and access to the city's schools and childcare facilities."

Has Berlin earmarked enough?

What's more, the Deutscher Städtetag estimates that the 670 euros is only likely to cover around two-thirds of the actual costs. The group suggests 1,000 euros per person, per month, as a more realistic level.

One reason why per-person figures are favored over lump sums - even in the legislation - is the current uncertainty as to how many people will arrive in Germany in the coming months and years. The report offered two scenarios, one based on 500,000 new arrivals in 2016 and the other on 1.2 million. This put the total estimated costs for states and municipalities at between 7 billion and 16 billion euros - and, perhaps more importantly, it put the shortfall after implementing Berlin's new laws at between 3.5 and 5 billion euros.

However, the report did not call for responsibility to be taken out of towns and cities' hands - arguing that only they had the flexibility to find solutions tailored to the lay of the land.

"In economically weak regions, major programs will be needed to integrate refugees into the labor market. In regions with low unemployment, but an expensive real estate market to go with that, massive investment towards social housing will be necessary," Dedy said.