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LINES OF CONFLICT ON EU REFORM IN GERMANY
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areas. Given the increasing number of refugees
arriving in Germany and the de facto exclusion
of the EU Dublin Regulation in 2015, it is unde-
niable that economic questions are also dis-
cussed in the context of migration. However the
response to these questions has either been
apocalyptic predictions that the labour market
and social security systems could not cope, or
unrealistic optimism. While the AfD managed to
address many citizens who doubted Angela
Merkel’s assertion that “We can do it”, in 2015
and 2016 politicians, economists and journalists
were vying with each other to say how much
refugees could contribute to an increase in GDP
through an increased demand for goods and
services from asylum seekers themselves and
through the states providing infrastructure.
Furthermore, there was much speculation about
whether increased immigration rates could be
just what was needed to tackle the looming lack
of skilled labour in a growing economy and the
social security system, in view of demographic
change.
It only became clear in 2017 that many of
the assumptions made had been too optimistic.
It can easily take 20 years to learn German, get
basic and further training, get integrated in the
labour market, and work one’s way up from the
low-wage sector to the median wage for em-
ployees. In any case, positive fiscal effects are
only to be expected if extensive investment is
made to integrate immigrants. The federal gov-
ernment has implemented many individual
measures, but so far it has failed to set up a
broad integration programme that expands the
range of opportunities to learn German and ac-
quire other skills, and dovetails with the profes-
sional training system. Under particular pressure
from the CSU, the new governing coalition is
focusing on deterrence rather than expanding
integration measures.
The background to this is clear. On one
hand, additional integration measures are very
costly, and the coalition members are united in
their goal of balancing the federal budget, or
even reaching budget surpluses in the best-case
scenario, in accordance with the “debt brake”
placed in the constitution in 2009. On his own
admission, Finance Minister Olaf Scholz (SPD),
would like to observe the economically ques-
tionable policy of “breaking even” (“Schwarze
Null”) espoused by his predecessor, former
Finance Minister Schäuble (CDU). Moreover,
some sectors of the population have shown
their built-up displeasure with political neglect
over the last three years, by using the AfD and
to some extent
Die Linke
as conduits into na-
tional political arenas.
This particularly applies to the working low-
er-middle class, which is afraid of losing eco-
nomic and social status. These people have long
looked on in frustration as the achievements of
the welfare state and levels of public infrastruc-
ture are pushed back in the face of pressure
from global competition, and wages stagnate in
real terms - particularly in the east of the coun-
try and in the former industrial metropolises of
the Rhine and the Ruhr. Faith in political plans to
deal with the new challenges of increasing
global interdependence has been waning since
the second term of the SPD-Green coalition,
2002-2005, when former Chancellor Gerhard
Schröder’s Agenda 2010 was implemented, if
not earlier. This approach has given way to a
programme of adjustments to adapt to the mar-
ket forces of globalisation. Competition from
other locations was countered with low corpo-
rate taxes, unemployment was countered by
building up the low-wage sector, and empty
state coffers were dealt with by reducing social
services and privatising or not renewing infra-
structure. Emphasis was placed on individual