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Deutsche Bank: refugees a 'huge opportunity'

December 14, 2015

While critics call the newcomers a financial burden, one of Germany's top economists has praised them as a 'huge opportunity' for Europe's biggest economy. Migrants, he says, could help boost Germany on the global stage.

A Somali refugee receives vocational training in Munich, Germany
Image: picture alliance/dpa/S. Hoppe

Refugees were "the best thing that's happened [to Germany] in 2015," Deutsche Bank chief economist David Folkerts-Landau said on Monday.

In an interview with German daily "Die Welt," Folkerts-Landau called the influx of migrants seeking a fresh start in Europe's biggest economy "a huge opportunity."

However, with more than one million people - many of them Syrian refugees - having crossed the country's borders so far this year, critics worry they will place an unprecedented burden on state coffers.

Refugee renaissance

But the real threat, said the Deutsche Bank top analyst, was Germany's rapidly ageing population, which many economists warn could diminish the country's future standing on the global stage.

If integrated properly, the newcomers could help "strengthen Germany's economic position globally as well as in Europe over the coming decade," he predicted, estimating that the newcomers could "easily" make up some 10 percent of the country's population by 2025.

"I can even picture a cultural and economic renaissance similar to the one in the decades prior to the beginning of World War 1," he told the German newspaper, which is available in more than 130 countries.

Don't do it like France

Still, Folkerts-Landau admitted that welcoming hundreds of thousands of migrants wasn't without risks, pointing to France as case of immigration gone awry.

"[The government there] hasn't managed to integrate its migrants from North Africa properly," he said, a day after France's anti-immigration Front National party was narrowly beaten in regional elections.

With similar right-wing sentiments boiling over in Germany in recent months, some observers have warned that unless the government in Berlin caps the number of migrants it takes in, there could be a fierce backlash from the people already clinging to society's bottom rungs.

Suspending the minimum wage

The key to not repeating France's mistakes, said the chief economist, is to pave the way for easier access to the German job market, so as to minimize the financial burden of migrants on states. To this end, Folkerts-Landau said the Bundestag must suspend the national minimum wage for migrants, which would make employers more likely to take a chance on the newcomers.

If lawmakers don't, he warned, "we will soon have five million people, who have no jobs, no perspectives and who will be stuck in ghettos. Employment is the condition sine qua non of successful integration."

Angela Merkel Person of the Year Time Magazine Ausschnitt
At a tumultuous time for Europe, Chancellor Merkel's leadership earned her Time Magazine's 'Person of the Year' title.Image: picture-alliance/AP Photo/Time Magazine

Because many of the newcomers are "inadequately qualified," however, he said many of them will have to make do with "comparatively low-paying jobs." In light of Germany's ageing population, he singled out nursing as one of the sectors where migrants could easily - and swiftly - gain access to the labor market.

But things would be different for their children, he predicted. "The second generation, which will attend school here, will have much better prospects."

'We will cope'

"Obviously, it will cost money to [take care of] the newcomers at first, but Germany can afford it," he said.

"I always was a proponent of a very conservative fiscal policy - but public investment…in the integration and education of migrants is money very well invested. Human capital is not only a national economy's most important resource, it's also the one with the biggest yield."

"If everyone in the country just lends a hand," said Folkerts-Landau, Germany will live up to Chancellor Angela Merkel's promise: "We will cope."

pad/uhe (KNA, Die Welt)