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Welfare for Immigrants EU Wants Fortress Germany to Open Up

Brussels is demanding that even foreigners who have never worked in Germany should have access to the country's unemployment benefits if they hail from an EU member state. The EU is firing Germany's already overheated immigration debate.
Von SPIEGEL Staff

Lazlo Andor knows from personal experience just how advantageous it can be to go abroad. The Hungarian politician studied economics at universities in Washington and Manchester and then worked as a professor in New Jersey for almost four years. Today he's the commissioner responsible for social affairs on the European Commission in Brussels. The social democrat is fond of saying that the right to live and work anywhere one wants in Europe is "one of the cornerstones of EU integration."

Last Friday, he sent a strong message to the German public. In a 40-page position paper for the European Court of Justice in Luxembourg, the EU's highest court, Andor's staff argues that access to Germany's social system be simplified for other EU citizens.

The arguments Andor's experts put forth in the paper -- under headings like the "right of free mobility" and "access to social benefits, regardless if a person has paid into the system" -- could add further fuel to an already overheated immigration debate here in Germany. Since the Christian Social Union (CSU) party -- the Bavarian sister party to Chancellor Angela Merkel's Christian Democratic Union -- began a crusade against what it calls "poverty immigrants" and "benefit tourists" last year, using the kind of populist language more typically heard at a pub, German politicians have been discussing the creation of new instruments in an effort to keep undesired foreigners out.

Among the ideas being touted are an increase in deportations of foreigners or taking the fingerprints of Bulgarian or Romanian nationals who have entered the country. Now the European Commission is calling for Germany to change its social security laws in the opposite direction in order to ensure easier access to the country's Hartz IV benefits for the long-term unemployed that are at the center of the dispute.

Brussels Attacks 'Blanket Rejection' for Benefits

Officials with the Commission, the EU's executive body, said last week they in no way want to water down "clauses designed to protect against benefit tourism." At the same time, they also reiterated that they consider one of the central provisions of German social security law to be illegal. The idea that Germany can reject social support to EU nationals without a job runs counter to current EU law, they argue.

If the European Court of Justice, which must soon make an initial ruling on the issue, backs the Commission's arguments, it would mark a setback to the campaign by the CSU. Instead of the CSU's "those who cheat, are out" slogan, the guiding principle behind the next reforms to Germany's Hartz IV unemployment benefits would be: "Those who want to come to Germany, can't be denied entrance."

It's no wonder, then, that CSU party boss Horst Seehofer quickly responded to the news by firing fresh broadsides at Brussels. "The European Commission comes up with a proposal almost every week that threatens either German jobs or the acceptance by the population of the European idea," Seehofer said. "The European Commission's disregard for the facts of life in Europe is cause for despair."

German Laws Contradict European Principles

It's possible the Bavarian governor, a man known for his populist bent, will once again strike a chord with public opinion. But when it comes to the facts of the issue at hand, Seehofer is wrong. The attempt to use blanket social security rules to keep out immigrants from Eastern Europe not only makes little sense economically -- it's also the wrong way of engaging in a justified effort to combat abuses of the social system. Germany's laws on this front clearly contradict European principles.

Legal experts have long held this view. "If the German state had really wanted to wall off its social security benefits from other EU citizens, it would have needed to act a lot earlier," says Thorsten Kingreen, a professor of social law at the University of Regensburg in Bavaria.

The train left the station during the late 1990s when the European Court of Justice, in a series of rulings, began to continuously expand social rights in the EU. "Since 1998, member states have no longer been permitted to discriminate against citizens of other member states when disbursing social benefits," says Kingreen. The EU implemented this legal interpretation of its Free Movement Directive a decade ago, and Germany is the only country in which it hasn't become reality.

EU citizens who come to Germany to find work have no automatic right to unemployment benefits, even if they are legitimately seeking a job. That leads to an absurd situation in which an asylum seeker who has entered the country illegally has the right to demand the basics needed to survive, but a French or Bulgarian national who has traveled to the country on a perfectly legal job hunt does not.

A Matter of Time

Given that context, it is hardly a surprise that German social courts have expressed doubts about national regulations. In law firms and offices of government ministries around the country, rulings are piling up that seek to bestow greater rights to immigrants from Southern and Eastern Europe on the German labor market.

Whether European justices will ultimately side with critics or not could ultimately depend on how they decide to classify the German social benefits being looked at. The decisive question is whether Hartz IV unemployment payments are social benefits or a labor market policy instrument. In terms of social welfare benefits, member states still have the right to be tight-fisted, at least for the time being. This does not, however, apply to instruments of the labor market.

Germany has already laid its groundwork on the issue. Hartz IV was not registered in Europe as social welfare. Rather, it was registered as Germany's implementation of the Migrant Workers Regulation. "By doing so, Germany has already stripped itself of any excuses," says Kingreen. "It is only a matter of time before the European Court of Justice scraps our blanket exclusion clause."

Germany Needs Immigrants

The existing barriers to entry for immigrants in Germany are legally unsustainable. To tighten them even further as the CSU would like to do is doubly dangerous. Instead of having a deterrent effect on people seeking to abuse the social system, it might instead scare away the kind of well-educated workers that Germany so urgently needs. And with its graying and shrinking population, the only option Germany has left for filling vacant jobs and keeping the coffers of the nation's social welfare system flush is immigration.

It has only been thanks to the influx of people from Poland, Romania, Spain and elsewhere that Germany's population has risen slightly over the past three years. At the end of 2013, an estimated 80.8 million people lived in Germany, about 300,000 more than the year before.

And even though critics of immigration in Bavaria might hold a different view, the reality is that skilled foreign workers don't necessarily find Germany to be an attractive place to work and live. Indeed, some local mayors in Bavaria who are today toeing the CSU party line may find themselves traveling this year to Bulgaria or Romania to recruit trainees from those countries to Germany.

'We Need More Not Fewer Immigrants'

But it will be very difficult today to make up for past failures and lost time. When Eastern European countries like Poland, the Czech Republic and Hungary joined the EU in 2004, Germany was one of the few countries that took advantage of EU rules allowing member states to restrict access to their labor market for citizens from the new EU member states for seven years. Instead, millions of well-educated workers skipped Germany altogether and made their way to Britain, Spain and Ireland.

When those countries obtained full access to the labor market in 2011, a debate similar to the one simmering today about Romanians and Bulgarians ensued. Prominent Munich-based economist Hans-Werner Sinn, for example, issued a loud warning against Eastern European immigrants, who he claimed would overrun prosperous Germany, lamenting the phenomenon as "immigration into the social welfare system."

'Germany Profits from Immigration'

That isn't the way things turned out in the end. Of the 400,000 Romanians and Bulgarians who live in Germany according to the federal government's Central Foreigners Register, the bulk are employed, including around 60 percent of 15- to 65-year-olds, estimate researchers at IAB, the research institute for the Federal Employment Agency. And that's only one example.

Those statistics also show that only 7 percent were unemployed, and only 10 percent received Hartz IV welfare benefits for the long-term jobless or financial benefits to help them make ends meet, indicating that they are a lot less needy than the average among the foreign population in Germany. The fact is that immigrants from Romania and Bulgaria have an above-average interest in education and training, they have fewer children than Germans and, as a result, they make use of less money from the government's family allowance.

Indeed, most economists in Germany offer similar assessments of the issue. "We need more not fewer immigrants," says Clemens Fuest, the head of the Mannheim-based Center for European Economic Research (ZEW). "This may not have been the case as recently as the 1990s, but today's immigrants are on average better qualified than German workers," says Michael Hüther, head of the Cologne Institute for Economic Research, a think tank that is aligned with employers' associations. Meanwhile, Marcel Fratzscher, president of the German Institute for Economic Research (DIW) in Berlin, is convinced: "Even if there are individual cases of immigration to take advantage of our social system, Germany still very much profits from immigration."

To be sure, in larger cities like Frankfurt, Duisburg or Munich, there are large groups of immigrants from Romania and Bulgaria who present a significant financial burden for these municipalities. Close to a year ago, the German Association of Cities, even warned  that the influx of Romanians and Bulgarians threatened "social balance and social peace." But last week, Ulrich Maly, the mayor of Nuremberg and president of the organization, softened the organization's tone, conceding , "We are not dealing with a national challenge."

Germany's True Scandal

The real social scandal in Germany is the more or less open exploitation of foreigners who come to the country just to work -- and not some supposed massive influx of welfare recipients. Lured by dubious middlemen, many immigrants are often forced to peddle themselves as cheap day laborers in Germany's major cities, earning far below minimum wage.

Orhan Efraimova is one. Last spring, the 38-year-old Bulgarian climbed into a van with eight other men. He left his home country with two pairs of pants, three shirts and the hope of a better life. When the driver finally dropped him off at the market square in Hamburg's Wilhelmsburg neighborhood, he was told that he should just take a seat in one of the nearby cafes. "The bosses," he said, would quickly recognize men like him who were hungry for work and would take them with them.

He soon obtained the business license he needed in order to work legally in Germany. Normally, if a person applies for the document at the local city offices, it costs €20. But Efraimova's "boss" charged him €150 ($205) for the document, plus an additional €200 just for registering him. Since then, he has been working in bogus self-employment --in jobs that should be a staff positions under German law -- at different construction sites, sorting canned foods or packing pallets. In the beginning, he earned €35 a day and later €45, but "never more than €50," he said.

Efaimova pays his employer €250 a month for a mattress in a 15-square meter room that he shares with six other Bulgarians and rats. "I'm actually content," he says, adding that only a few things bother him. Since his arrival in Germany, he has only managed to wire €250 to his family back at home. In Germany, he laments, there are "simply too many holidays."

Those really wanting to do something to address the true problems linked to poverty migration ought to be pushing for more effective rules prohibiting wage exploitation and forms of self-employment that should actually be full-fledged employee positions. At issue here is the need for regulations applying to both Germans and other Europeans that are as harmonized to the extent possible across the EU.

Of course, this isn't the kind of message politicians are keen to hear. Many would rather go on stirring up sentiment against immigrants as well as the European Union. Andreas Scheuer, the CSU's new general secretary, accuses the European Commission of giving "free admission to the German social safety net." He predicts it will lead to a serious influx of immigrants from Bulgaria and Romania.

Germany Should Roll Out Red Carpet

Even on the side of the center-left Social Democrats, some politicians have remained conspicuously silent about the issue. During the coming weeks, municipal elections are slated in Bavaria, populous North Rhine-Westphalia and nine other states. Many politicians will likely avoid the possibility of frightening voters with the prospects of an uptick in immigration to Germany.

The only politicians speaking openly about the issue are those who still have some time to go before they have to face their voters again, like Torsten Albig, the SPD governor of the state of Schleswig-Holstein.

"No one in Schleswig-Holstein or Bavaria wants our companies to go under because of a lack of skilled workers or to have to be cared for by robots because there are no caregivers left," he says. "That's why we need to open our doors, roll out the red carpet and extend our hands to all immigrants."

REPORTED BY MELANIE AMANN, SVEN BÖLL, MARKUS DETTMER, ÖZLEM GEZER, ANN-KATRIN MÜLLER, MICHAEL SAUGA AND CHRISTOPH SCHULT

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