Austria on Wednesday became the first European country to formally set a cap on how many asylum-seekers it will accept annually, a move that could add fuel to the fire of a debate about limits that is raging in neighboring Germany.
Austrian Chancellor Werner Faymann, a Social Democrat who heads the right-left coalition government in Vienna, said the country would set the limit at 37,500 for this year and at 127,500 by mid-2019.
Last year, Austria accepted 90,000 asylum-seekers, as Mr. Faymann largely aligned with German Chancellor Angela Merkel's stance in opposing hard caps and unilateral decisions on refugee policies by individual member states of the European Union.
Buckling to pressure from his conservative coalition partner, the People’s Party, the Austrian chancellor now has changed his tone.
So far, Ms. Merkel has refused, insisting that seeking asylum from persecution is a right that should not be restricted Werner Faymann, Austrian Chancellor
“We cannot accept all asylum-seekers in Austria, neither can Sweden or Germany,” Mr. Faymann said, who spoke with Ms. Merkel before announcing the decision, which he characterized as a “guideline” rather than a strict cap.
Austria’s deputy chancellor, Reinhold Mitterlehner, a member of the People’s Party, on the other hand, called it an “upper limit,” according to Austria’s public television station ORF.
Either way, the decision could embolden conservative politicians in Germany – most prominently Bavaria’s state premier, Horst Seehofer, who also heads the Christian Social Union, the sister party of Ms. Merkel’s Christian Democratic Union. Mr. Seehofer and others have demanded that Chancellor Merkel impose a similar limit in Europe’s largest economy.
So far, Ms. Merkel has refused, insisting that seeking asylum from persecution is a right that should not be restricted. The chancellor has agreed that Germany should do what it can to limit the numbers arriving this year, after more than 1 million entered the country in 2015.
Germany’s coalition government on Wednesday declined to comment on Austria’s decision. A spokesman for Ms. Merkel would only say the government would continue to seek a “common European solution” that addresses the reasons people seek asylum and sustainably reduces their numbers.
In a speech at the World Economic Forum in Davos on Wednesday, Joachim Gauck, Germany’s president, a largely ceremonial post, said Germany needed to do a better job of limiting the number of refugees claiming asylum in the country, but he stopped short of calling for an outright cap.
“A limitation strategy may even be both morally and politically necessary in order to preserve the state’s ability to function,” said Mr. Gauck, a popular independent politician and former Lutheran minister originally from communist East Germany. “If democrats refuse to talk about limits, they leave the field to populists and xenophobes.”
Mr. Gauck expressed concern that the refugee crisis could spiral out of control, threatening the European Union’s “peace and prosperity.”
After his speech, Mr. Gauck told reporters it was “extremely likely” that some kind of limit would be introduced in Germany this year.
An upper limit for asylum does not solve any of the problems, is morally questionable and infringes upon the U.N. Refugee Convention. Herbert Reul, CDU leader in European Parliament
But support for Ms. Merkel’s position against limits continues to be strong, as does criticism of Austria’s reversal.
Conservative German politician Herbert Reul, who leads the CDU/CSU group in the E.U. Parliament, blasted Austria’s decision as a mistake.
“An upper limit for asylum does not solve any of the problems, is morally questionable and infringes upon the U.N. Refugee Convention,” he said.
However, Austria is not the only E.U. country attempting to restrict asylum-seekers' access at its borders, even though it is the first country to set a specific limit for the coming years. Many Eastern European countries have fortified their borders, refusing to take in refugees and abide by a quota system agreed last year by the European Union.
Both Denmark and Sweden have re-introduced checks at their borders, placing Europe’s Schengen treaty of open internal borders in jeopardy.
That’s putting some business leaders on edge.
Reiner Hoffmann, the head of Germany’s umbrella organization for trade unions, cautioned against closing national borders within the European Union and said he supports Chancellor Angela Merkel’s open-door refugee policy.
In an interview with Handelsblatt, Mr. Hoffmann said: “It would be a disaster if freedom of movement went to the dogs and the Schengen agreement fell.”
Europe’s economy is highly integrated and connected, which means that delays of five, seven or nine hours at European borders are “poison,” he said. “The open internal borders are the lifeblood of the European economy. We cannot clog them,” Germany’s top trade unionist added.
Mr. Hoffmann also expressed support for Ms. Merkel’s current policy of accepting unlimited numbers of refugees claiming asylum in Germany, which has come under increasing fire from conservative policymakers and the public in the last few weeks – in part to due to outrage over hundreds of alleged assaults on women by recent migrants in Cologne and other German cities on New Year’s Eve.
“I absolutely respect the chancellor’s stance on refugee policy,” Mr. Hoffmann said.
Economic growth from refugees could contribute an extra 0.5 percent to 1.1 percent to German GDP growth by 2020. Reiner Hoffmann, Germany's top trade unionist
European Council President Donald Tusk, speaking before the European Parliament on Tuesday, warned that Europe must solve the refugee crisis soon or risk “the collapse of Schengen.” He said a planned meeting of European heads of state on March 17-18 could be the last chance to save the treaty.
Against this backdrop of political and social crisis, the International Monetary Fund on Wednesday released a study that finds the record influx of refugees into Germany is accelerating the country’s economic growth.
The German economy will grow an additional 0.3 percent in 2017, the IMF said, as it spends to house, feed and care for more than 1 million refugees. Only Austria, with an additional 0.5 percent, and Sweden, with 0.4 percent, will get a bigger GDP boost, the study found.
Speaking at the World Economic Forum in Davos, where the report was released, IMF head Christine Lagarde said the negative aspects of the refugee influx were “limited” and “only temporary.”
Economic growth from refugees could contribute an extra 0.5 percent to 1.1 percent to German GDP growth by 2020, the report’s authors concluded. The study assumes that Germany will admit an average of 413,000 refugees per year through 2020.
Long-term GDP growth from the refugees will only be guaranteed, the study concluded, if Germany and other European countries quickly integrate them into the workforce.
According to the IMF study, the German government will spend 0.35 percent of GDP this year on refugees. Those fiscal costs trail Sweden, which is spending a full 1 percent of GDP; Denmark, which is spending 0.53 percent; and Finland, which is spending 0.37 percent, on refugees.
Hans-Peter Siebenhaar is Handelsblatt’s correspondent in Vienna. Thomas Sigmund heads the Handelsblatt Berlin office. Thomas Ludwig is a correspondent in Brussels for Handelsblatt. Nicole Bastian is the foreign news coordinator at Handelsblatt. Jan Hildebrand is the deputy Berlin bureau chief. Daniel Delhaes reports on politics, transport and airlines from Handelsblatt’s Berlin bureau. Frank Specht focuses on the German labor market and trade unions.