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Refugee influx could cost Germany 21 billion euros this year - Ifo

BERLIN (Reuters) - Germany faces costs of over 21 billion euros (15 billion pound)this year to house, feed and educate hundreds of thousands of refugees, the Munich-based Ifo institute said on Tuesday.

The new estimate, which assumes that 1.1 million migrants will seek asylum in Germany in 2015, represents a sharp increase over a previous projection from late September which put the cost at 10 billion euros.

That estimate had assumed 800,000 arrivals and did not include costs related to education and training, which the Ifo said were necessary to ensure that refugees, many of them fleeing war in the Middle East, were successfully integrated.

“Training and access to the labour market are key in terms of both costs and integration,” Gabriel Felbermayr of the Ifo institute said in a statement.

The German government has not published an official estimate for how much the influx of refugees will cost it this year, but it has boosted funding to the country’s 16 regional states by 4 billion euros.

For next year, German states and towns have said they could face costs of up 16 billion euros. Finance Minister Wolfgang Schaeuble has said the federal government will invest roughly 8 bilion euros next year to shelter and integrate asylum seekers.

Ifo also reiterated its call for a flexible interpretation of Germany’s minimum wage, saying a majority of businesses saw the 8.50 euro ($9.10) floor as a hindrance to employing refugees.

Some members of Chancellor Angela Merkel’s conservative camp have also called for flexibility on the minimum wage, but her coalition partner, the Social Democrats (SPD), have ruled out changes to one of their flagship reforms.

Reporting by Tina Bellon; Editing by Noah Barkin