Merkel says Germany can cope with refugees without raising taxes-Reuters

Germany can cope with a record influx of refugees this year without raising taxes and without jeopardizing its balanced budget, Chancellor Angela Merkel said on Saturday.

With relatively liberal asylum laws and generous benefits, Germany is the European Union's biggest recipient of refugees fleeing war in the Middle East and economic migrants from southeastern Europe.



More than 100,000 asylum seekers registered in August, and about 800,000 refugees and migrants are expected to come to Germany in total this year -- four times last year's level.

In light of the influx, the government plans to introduce a supplementary budget to free up funds for the refugees and to help towns on the frontline that are already struggling to fund accommodation and medical care for the new arrivals.

"We cannot just say 'Because we have a difficult task now, the balanced budget or the issue of debt are no longer important'," Merkel said in her weekly video podcast.

In an interview with local newspapers, Merkel promised that Berlin would not raise taxes because of the refugee crisis.

Berlin's comfortable budgetary position is making it easier to master such "unexpected tasks", Merkel said, adding the refugee crisis was the government's priority now.

Thanks to higher-than-expected tax revenues, Berlin could have leeway for extra public spending of up to 5 billion euros ($5.6 billion) this year, officials have said.

Many other EU countries, particularly smaller and poorer ones and those without a strong tradition of receiving migrants, are facing a much greater challenge to cope with the influx of people.

German Finance Minister Wolfgang Schaeuble said on the sidelines of a meeting of the Group of 20 leading economies in Turkey that Berlin was still calculating how much money it would cost to shelter the increased number of refugees.

The Frankfurter Allgemeine Sonntagszeitung said in a report to be published on Sunday that the costs for the government, federal states and municipalities would rise to roughly 10 billion euros this year from 2.4 billion euros in 2014.

SERIES OF MEASURES

Merkel repeated her call to distribute the refugees more equally across EU member states as part of a common strategy, saying: "The whole system needs to be redesigned."

Austria and Germany have thrown open their borders to thousands of exhausted migrants who have been bussed to the border by a right-wing Hungarian government that had tried to stop them but was overwhelmed by the numbers.

A German government spokesman said Merkel and Hungarian President Viktor Orban spoke by phone on Saturday and agreed the decision was a temporary one made for humanitarian reasons.

Hungary had been trying to apply the EU rule that migrants should seek asylum in the first EU country they arrive in.

Merkel's coalition is expected to agree on a series of measures on Sunday, including cutting red tape to facilitate the construction of asylum shelters, increasing funds for federal states and towns, and speeding up asylum procedures.

The agenda will include widening the list of countries deemed 'safe', meaning their citizens have no claim to asylum, probably to include Kosovo, Albania and Montenegro. Among those already deemed safe are Serbia, Macedonia and Bosnia.

Germany has this year deported more than 10,000 migrants who were denied permission to stay, many of them from western Balkan countries such as Serbia and Macedonia -- around the same number as for the whole of 2014, the magazine Der Spiegel said.

The head of the Federal Agency of Migration and Refugees, Manfred Schmidt, told the magazine that more than 75,000 asylum requests filed by migrants from western Balkan countries would be processed by the end of 2015, and most were likely to be rejected.

(Additional reporting by Hans-Edzard Busemann; Editing by Kevin Liffey and Mark Potter)