Germany Pledges More Funds to Help States Bear Migrant-Related Costs

By Andrea Thomas 
 Stock Market Quotes, Business News, Financial News from http://commodity-market-news.com

BERLIN — German Chancellor Angela Merkel’s government on Thursday pledged to give EUR7 billion ($7.7 billion) to the country’s 16 states until 2018 to help them deal with migration-related costs.

The agreement came after months of negotiations between the government and the states over how to finance the costs resulting from the arrival of roughly one million migrants last year, the highest influx to Germany since the end of World War II.

The latest pledge comes on top of the EUR2.6 billion already promised by the government to help the states to accommodate migrants during 2016 and 2018.

The states have put their own costs at roughly EUR21 billion this year, rising to EUR30 billion annually by 2020, and wanted the federal government to cover half — a demand Berlin has previously rejected.

But in pledging additional funds after Thursday’s meeting, the federal government accommodated some of the demands.

“The German government has moved considerably in favor of the states,” said Horst Seehofer, governor of Bavaria and one of the sharpest critics Ms. Merkel’s migration policy.

Others, such as Bremen Gov. Carsten Sieling, said the result was disappointing but the extra cash would be better than nothing.

Last week, the German finance ministry said it expects to spend EUR77.6 billion over the next four years feeding, housing and training refugees as well as helping their home countries to stem the flow, according to updated budget estimates for the 2017-20 period.

Adding budgeted costs for the current year would bring the total to EUR93.6 billion by 2020 for the federal government.

Write to Andrea Thomas at andrea.thomas[a]wsj.com

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