BERLIN (Reuters) - Germany can handle the costs of the refugee crisis without risking its balanced budget, while the wider automotive sector appears unscathed by the emissions scandal embroiling Volkswagen (VOWG_p.DE), the head of the Bundesbank said on Sunday.
Jens Weidmann was upbeat about the prospects for Germany’s economy despite a slowdown in China and other emerging markets and the possible repercussions from the Volkswagen scandal.
“Germany is in a good position. We have a really strong upturn and high levels of employment, even if the growth rate may have weakened somewhat in the second half,” Weidmann said in an interview with the Tagesspiegel newspaper.
He added that he saw no indication that the problems at Volkswagen were dragging down the rest of the automotive sector.
“For the state of the German economy neither VW nor Deutsche Bank are representative,” he added.
Deutsche Bank, the country’s biggest lender, recorded a 6 billion euro loss last quarter, scrapped its dividend for the first time and said it would ax 15,000 jobs.
Weidmann also dismissed suggestions that the influx of refugees could endanger the “schwarze Null” or ‘black zero’, meaning the balanced budget the country achieved in 2014 for the first time since 1969.
“In spite of all the uncertainties, I don’t see at the moment any reason to write off the ‘schwarze Null’,” Weidmann said.
Germany expects to receive up to 1 million asylum seekers this year alone. But its generosity comes at a cost, and local authorities are clamoring for cash to house, care for and integrate those fleeing wars in the Middle East, Asia and Africa.
Last week, Finance Minister Wolfgang Schaeuble said Germany would balance the budget again in 2015, but was more cautious for next year, pointing to “high uncertainties” about how many refugees would continue to come to Germany.
Weidmann also warned against softening European Union budget rules due to the refugee crisis, saying the European Stability and Growth Pact already accommodated for extreme and surprising burdens on individual countries.
He said the refugee crisis could only be mastered if Germany succeeded in integrating those who stayed, including by getting them into the labor market.
“As a result refugees could then contribute to easing our demographic problems. But they won’t solve them,” Weidmann said.
Marijn Dekkers, the chief executive of German drugs and chemicals group Bayer (BAYGn.DE) also played down expectations that the refugee influx would be a boon for the economy.
While providing for refugees would bring a short-term economic boost, he said it would take a lot of time and effort to bring them up to a level where they are able to find work in Germany, he said.
“I’m only warning against being under illusions: it will take at least 15 years until the large majority of asylum-seekers can really be independent of state aid and earn their own income,” Dekkers told Die Welt am Sonntag newspaper.
Reporting by Caroline Copley; Editing by Hugh Lawson