Monday, 22 February 2016

FOCUS-MONEY: According to your calculations, the refugee crisis is will cost Germany 900 billion euros. How do you put together these gigantic costs?
Bernd Raffelhüschen: This is the negative fiscal dividend that emerges from generational accounting for Germany if one assumes that a total of two million refugees come to Germany by 2018 and successfully integrate into the employment market within six years. This scenario would result in an expansion of the state's sustainability gap. 
MONEY: What do you mean budget sustainability gap? 
Raffelhüschen: The sustainability gap is the total of explicit and implicit state debt. Implicit debt results essentially from future budget deficits. These are future liabilities of the states, so collective claims of the citizens for pensions, care or health insurance and basic social benefits, pensions, etc. The more generous the promises of services in a nonetheless already ageing society, the larger this implicit debt burden is. If an unrestrained flow of refugees continues, the gap will grow wider. In the "Refugee flow" scenario described, the sustainability gap is more than 307% of the federal German gross domestic product, this being 900 billion euros more than in the basic case, where the sustainability gap is 275%. And this is already an optimistic assumption. 
MONEY: So what does the realistic scenario look like? 
Raffelhüschen: If qualifications and integration into the employment market take more time, the costs will be significantly higher. Then the costs for the refugees will be well over 1 trillion euros.
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