During the general budget debate Chancellor Angela Merkel stressed that the economy is strong and that Germany is in a good state of health, thanks to the country’s sound financial and budgetary policy. With a view to the rising costs of caring for refugees, the Chancellor reaffirmed the government’s commitment to its medium-term financial planning goal of no new borrowing. Angela Merkel said, "Our sound financial position also allows us to respond to new challenges that occur suddenly."

Germany is helping

Never, since the Second World War, have so many people fled their homes at once, said Angela Merkel. Up to 800,000 people will arrive in Germany this year as refugees and asylum-seekers, she said. Germany is helping, declared the Chancellor.

Now it is a question of "rolling up our sleeves and getting rid of all the obstacles that are in the way". Then we can live peacefully with the people coming to Germany. But, it is quite clear, stressed Angela Merkel, "We cannot simply carry on as we have done to date."

The German government is doing its duty by providing an additional six billion euros in 2016, half of which will go to the federal states and local authorities. Germany can cope with the financial burden, because the country is currently in a state of robust economic health and domestic demand is holding up, in spite of the risks that can be seen at the level of the global economy.

Fighting ISIS

Angela Merkel touched on the instability in countries like Syria and Iraq, which she identified as root causes of the refugee movements. She recalled the support that Germany has provided, offering training to 3,000 members of the Iraqi security forces. The fight against IS also remains a major challenge, she added. She pointed out that some of the IS fighters come from Germany and other European countries.

The conflicts are happening on Europe’s doorstep, and they affect us directly, said the Chancellor. As a result, up to 800,000 people will come to Germany this year as refugees and asylum-seekers. The horrific images of dead children and the dreadful fate of so many people must make it clear where our responsibility lies, she said.

In this context Angela Merkel thanked the German navy which has already saved more than 7,200 refugees in the Mediterranean. The refugee situation, she said, is a challenge for the entire country. "Just as we responded swiftly to the financial crisis, we are responding to this challenge," said Angela Merkel. The German Bundestag is to approve a package of measures before the end of October.

European response needed

At the same time Angela Merkel called for a European response to the influx of individuals feeling their homes, because this is not a problem that can be resolved at national level. What is needed is a mandatory distribution of refugees among EU member states on the basis of fair criteria. That is why there can be no ceilings on the number of asylums countries are willing to take in. This is a challenge for every European state. If Europe fails in the face of the refugee situation, one of the main intentions of the founders of the EU will have been lost, she said.

At the same time cooperation with African states and indeed with Turkey must be improved. As Syria’s immediate neighbour, Turkey has accepted a great deal of responsibility. And it is clear that the situation in Syria, Eritrea and Iraq will not change overnight. This clearly illustrates how domestic, foreign and development policy is interconnected, she said.

The mistakes of the 1960s must not be repeated

The Chancellor listed the following fundamental challenges:

• Swift assistance for and integration of asylum-seekers and civil war refugees. Angela Merkel said, "We must learn from the mistakes made in the 1960s and forge ahead rapidly with integration." Then, she said, the opportunities outweigh the risks.
• Individuals coming to Germany to escape economic distress will not be allowed to stay. Angela Merkel said, "However difficult their lives might be, this is an unpalatable truth that has to be told." They will be returned to their home countries more rigorously than has hitherto been the case.
• We must explain to the people allowed to stay in Germany precisely what the rules are here. Angela Merkel said, there will be zero tolerance for any efforts to build parallel societies within Germany.
• Zero tolerance for rabble-rousing, violence against refugee shelters or any xenophobic activities. Angela Merkel said, "Perpetrators will feel the full force of the law."

Angela Merkel declared her conviction that Germany must lead the way if European solutions are to be found. The challenge will be a long-term one, and it is vast. She is, however, more convinced than ever before that Germany can master it.