Friday, November 28, 2014

The Funding Gimmick for Refugees

The German federal government finally came out this morning and agreed to pass down funding to individual German states in support of their operations for refugees.

The amount?  A maximum of 500 million Euro for 2015 and 2016, to be paid out on expenses for the refugee centers.  The negative to the deal?  Half of the money must be paid back within twenty years.  So you can imagine yourself a mayor of some town which has been ordered by the a state government in Germany to take in 150 refugees, and there's finally some real funding besides the six to seven Euro a person per day for food.  Then you sit there and think about the 100,000 Euro that you might be able to procure to cover 'other' expenses for 2015 and realizing that somewhere over the next twenty have to invent some property tax or fee within the city to pay back 50,000 Euro.

Yeah, it's a screwed-up loan in some ways....without any stupid fee or interest rate attached.  

The likely end scenario to this?  Every mayor and city council member will grab onto the money and accept it with no heartburn.  The payback deal?  They aren't worried....they won't be around in ten to fifteen years when people start to discuss this.  The folks standing there in eighteen years?  They will be yanking on both the CDU and SPD to dismiss the stupid pay-back part of the deal, and they will eventually do this.

So, this whole thing is a contrived gimmick to make the government look good for now, and look stupid twenty years in the future.  That's the simplicity of the deal.

As for use?  I'd take a guess that new furniture will be procured in 2015, along with some leased vehicles now being used by the refugee centers.  The 500 million Euro?  I'll make a bet that most of the money is already spent by the end of 2015, and it'll just lead onto episode number two.....more funding.

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