
German state to offer loans to asylum seekers
State officials in Thuringia have proposed a new model under which adult asylum seekers would pay back the loans after finding a job.
'Those who have come here and do not pay into the system should only receive social benefits as zero-interest loans,' Matthias Jendricke, a district administrator and centre-Left Social Democrats (SDP) politician, told the German news outlet Stern.
Mr Jendricke said the policy would be similar to the student loans system, with asylum seekers given discounts on their debt if they paid it back in a timely fashion.
The debt would also be reduced by 50 per cent for asylum seekers who found employment and took language courses within a year of arrival in Germany.
In addition to asylum seekers, non-EU migrant workers, including UK citizens, would also be eligible for the loans, he said.
The proposal comes as Germany significantly hardens its stance on mass migration after Friedrich Merz, the Chancellor, warned that its capacity for asylum seekers was overwhelmed.
Mr Merz, the centre-Right Christian Democrats leader, has already instructed border guards to turn away asylum seekers trying to enter the country via land crossings.
This week, it emerged the policy has so far cost the German taxpayer 80 million euros (£68m), with overstretched police forces racking up huge amounts of overtime and staying in hotels near border checkpoints.
New government statistics also revealed that Berlin was struggling to achieve its goal of persuading Syrian refugees to return home in the wake of the collapse of the Assad regime.
The German interior ministry has disclosed that only around 1,300 of Germany's one million Syrian refugees have gone back to the Middle Eastern state, despite the government offering them cash incentives to do so.
'More than four million asylum seekers and war refugees came to Germany in the last decade – our capacities to integrate so many people into our society are exhausted, our public order and internal security severely affected,' Günter Krings, a senior Christian Democrats MP, said in a recent interview with the Telegraph.
Mr Merz's coalition, which includes the SPD, is under immense pressure to reassure Germans over border security.
In last February's federal elections, the anti-migrant, far-Right Alternative for Germany came second, making it the de facto opposition. The result was unprecedented in German post-war history.
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Telegraph
23 minutes ago
- Telegraph
A slow-motion car crash is unfolding across Britain's housing market
Britain's homeowners are heading towards a cliff edge. Despite interest rates falling over the past 12 months, millions of heavily indebted households are preparing to come off cheap fixed-rate loans taken out when borrowing costs were at rock-bottom. At the same time, the housing market is at a low ebb, battered by a surge in stamp duty rates that has deterred buyers and helped drive down prices. This means that many homeowners are now being confronted with an uncomfortable reality that their flats and houses, which appeared good investments at the time, are worth much less than they had hoped. Advising sellers on what to do before their mortgage repayments jump has become a careful game of strategy for Howard Davis, of Howard Independent Estate Agents. For example, one of his clients has been trying to sell a two-bedroom flat in the leafy suburb of Clifton, Bristol, ahead of a painful remortgaging process in November. However, so far, they are struggling to do a deal for anything above the price paid for the property three years ago. 'We've reduced the price and managed to get six people around to look at it on Monday,' says Davis. 'Half of them said they quite like it, but they're frightened to commit because they're seeing other prices falling all the time. 'We were expecting, by Tuesday, to have several offers at a dramatically reduced price. And today, we haven't. So we may have to slice that price again. 'The guy's probably going to come out even from a property he bought three years ago, because he's frightened his interest rate is just going to hike up on his mortgage deal in November.' Fresh housing crunch The same is true across much of the South of England. House prices have dipped from March's peak, when the market was boosted by buyers rushing to beat the rise in stamp duty. However, more serious may be the market's failure in many parts of the country to rise at all since Liz Truss's mini-Budget of 2022, which led to a sharp drop in sales. Prices in London, the South East, the South West and the East of England are all still below their peaks almost three years ago. Across the UK as a whole, prices are up just 1.1pc over that timeframe. Worryingly, the long-held British belief that investment in property is a one-way bet is being shattered. According to Trevor Brown, a surveyor in Southend, Essex, owners can only sell if they accept the reality that their home is not worth as much as they hoped. 'There are fewer potential buyers, borrowing is still very expensive and stamp duty is levied on every sale that we see,' he says. 'It makes buying expensive. 'The first-time buyer market is out of the equation unless you have mum and dad ready to contribute considerably. And nobody is buying buy-to-lets any more at all.' Concerns over the property market have been fuelled by a recent exodus of landlords, triggered by a barrage of tax rises under the Conservatives and the introduction of Labour's renters' rights bill, which aims to strengthen the power of tenants. 'Auctions are full of tenanted properties, where landlords are getting out of the marketplace,' says Brown. All of which is teeing up what some see as a fresh housing crunch, threatening to undermine confidence in the wider economy and curbing much-needed tax revenues. However, the market has not yet completely stalled. Banks and building societies approved 188,000 mortgages in the three months to June. That is down from the 200,000 in the quarter before the stamp duty holiday ended on March 31, but is above the low of 135,000 in early 2023 in the wake of Truss's mini-Budget. But this rebound is far short of making up for lost sales in recent years, while mortgages are still running below levels seen before the pandemic. Worse still, pessimism on prices has crashed to its worst level in a year, according to the latest report from the Royal Institution of Chartered Surveyors, which regularly questions its members on the state of the market. Even though the Bank of England has cut its headline interest rate from 5.25pc to 4pc over the past 12 months, the average rate paid on mortgages is still rising. That is because the cheap loans which millions of families locked into before the cost of living crisis are now coming to an end. Those borrowers often bought with a mortgage rate of less than 2pc, but must now refinance with repayments north of 4pc. The average rate paid on the nation's mortgages is up from 2.1pc at the end of 2021 to 3.9pc today, with the Bank predicting that it will keep rising to 4.1pc into 2026. Before the pandemic, the average mortgage payment was less than £700, according to direct debit data from the Office for National Statistics and Vocalink. Now it is just shy of £1,000. Bank officials estimate that 3.6 million households will remortgage onto higher rates over the next three years, while only 2.5 million will see their rate fall. It means an average increase in repayments of £107 per month in the coming years. Belt-tightening Compounding the problem is a renewed rise in living costs. David Hickman, a surveyor in Devon, says that Rachel Reeves's National Insurance tax raid has hammered the local jobs market, undermining confidence among buyers. 'There's this job insecurity going around, and that's making people sit tight and not move unless they have to,' he says. A weaker housing market, in turn, becomes a danger to both the economy and the public finances. 'When asset prices rise, it gives people confidence to go out and spend,' says Sam Miley, at the Centre for Economics and Business Research. 'And when prices are falling, it encourages people to be a bit more cautious. 'At the moment, it is an environment of slower house price growth, so that plays out in a slower rate of consumption growth.' Such concerns will not go unnoticed for those in the Government, particularly as the Chancellor prepares to plug a black hole worth as much as £50bn. The Office for Budget Responsibility predicts that Labour's pledge to build more homes will trigger more property sales, which in turn will help the Treasury bring in more stamp duty for each sale. The watchdog anticipates annual revenues from stamp duty and other transaction taxes will rise from £13.5bn last year to £24.5bn by the end of the decade. But dwindling house prices will serve as a threat to that, fuelled by a recent drop-off in construction activity. Housing starts have barely budged and planning approvals have fallen to a record low since the Government unveiled its pledge to build 1.5 million homes by 2030. Any shortfall in property transactions could prove critical for Reeves, says Andrew Wishart, economist at Berenberg Bank. 'It is a relatively small tax but when the Chancellor is working with headroom of 0.2 or 0.3pc of GDP, any small tax could make the difference,' says Wishart. 'The forecast looks optimistic – when looking at housing construction volumes, they are a long, long way off the target.' However, support for the market might be on the way. Not only is the Bank of England expected to cut interest rates a little further in the coming months, but looser mortgage lending rules should also make life a little easier for first-time buyers. Yet regardless of that, many believe it will remain a buyer's market, including Jeremy Leaf, an estate agent in north London. 'There is a hell of a lot of property on the market, and if you want to stand out, you have to be realistic about price,' he says. 'A lady came in wanting to look at one of our properties. She said, 'It is very nice. But I have got 12 to see today.''


Telegraph
23 minutes ago
- Telegraph
If Labour gives £2.3bn of our cash to retired British Coal staff, it has truly lost the plot
How big is the black hole in Britain's public finances? The respected think tank National Institute of Economic and Social Research (Niesr) has just forecast a £50bn gap, which the Chancellor will be forced to plug by lower spending or higher taxes. Meanwhile, as Rachel Reeves tries to balance the books by saving every penny, her deputy, Darren Jones, Chief Secretary to the Treasury, casually told Parliament in July that he is 'considering proposals' to hand out £2.3bn of taxpayers' money to the 40,000 members of the British Coal Staff Superannuation Scheme (BCSSS). He added: 'I will be looking at those issues in more detail over the summer, and I hope to say more in the autumn.' What is this possible £2.3bn giveaway? The BCSSS, for above-ground managers, and its sister scheme, the Mineworkers' Pension Scheme (MPS), for those below ground digging out coal, were set up after the coal industry was nationalised in 1947, at a time when it employed 700,000 people. By privatisation in 1994, British Coal had shrunk drastically to just 13,000 staff. The BCSSS and MPS became stand-alone trusts, with the Government guaranteeing all pension entitlements, including annual inflation increases. In return, the Government receives half of any 'surplus' calculated at the three-yearly actuarial valuations, with the other half used to increase pensions. The average BCSSS pension of £15,000 a year is over twice the average MPS pension of £7,000, reflecting much higher pay for British Coal managers compared to the miners. The taxpayers' share of surpluses was also calculated at privatisation, which remained in both schemes as a reserve against poor investment performance. The £2.3bn the Government is now 'considering' giving to BCSSS members is the taxpayers' share of surpluses at privatisation, which under the BCSSS rules will be paid back to the Government in 2033 – in only eight years' time. The BCSSS trustees' argument for a £2.3bn giveaway is that last October, as revealed by Telegraph Money, the Government gave £1.5bn of taxpayers' money to the 112,000 MPS members, boosting their annual pensions by 32pc. This was all part of the rhetoric to end what Labour called an 'historic injustice' and fulfilled Labour's election manifesto pledge, repeated by Ed Miliband at the 2024 Labour Party conference. The BCSSS Trustees' argument simply rests on ' the similarities between MPS and BCSSS'. But the £1.5bn given away to MPS members didn't 'belong' to them in the first place. Just like the BCSSS' £2.3bn, it was the Government's share of surpluses at privatisation. Under the MPS rules it would have been paid back to the Government in 2029. Since privatisation in 1994, all BCSSS and MPS members have received every last penny of the pensions promised to them, including inflation increases. More than that, under the rules set up at privatisation, half of valuation surpluses have been given to members as 'bonus' pensions. To add insult to injury, after receiving the £1.5bn, the MPS trustees are now lobbying for all of any future surpluses to go to members, rather than half going to the Government. And handing over the £2.3bn of taxpayer money to the BCSSS members would not be in exchange for giving up the Government guarantee. If that money is to be handed over, it should at least be on the understanding that BCSSS pensions become a defined contribution plan, entirely dependent on the performance of scheme assets like other private sector schemes. But the trustees say they would 'not consider giving up the guarantee in exchange for the investment reserve… The guarantee does not form part of our discussions with the Government. It will remain in place, whatever decision the Government makes'. This would be an extraordinary case of: 'heads BCSSS members win, tails taxpayers lose'. As guarantor, the Government must step in to make payments if there is a future deficit. Once money is used to increase pensions the only way any future deficit to be plugged is for taxpayers to write a cheque. And because 85pc of BCSSS and MPS assets are in 'risky', that is, not index-linked bonds to match liabilities, any current surplus could easily become a deficit. The Government, and specifically Mr Miliband, still have some serious explaining to do about the £1.5bn already handed over to MPS. If Labour hands over another £2.3bn of taxpayers' money – £3.8bn in all – then surely this government will lose any shred of fiscal credibility left. Rachel Reeves should tell Darren Jones, in plain language, to stop 'considering' this proposal and say a polite 'no' to the BCSSS trustees, and the Labour MPs pushing it.


The Guardian
an hour ago
- The Guardian
The Guardian view on France's wine crisis: the answer to claret could be clairet
These are always anxious weeks in the Bordeaux vineyards, where 15% of France's wine is grown, including in celebrated places like Chateau Latour and Chateau Mouton-Rothschild. In earlier years, this ritual anxiety among the region's winegrowers had a pleasingly folkloric quality. In the middle of August, the grapes would ripen and their colour start to turn. About 45 days from now, tradition dictates, it will be time to start picking the 2025 vintage. As the wine writer Edmund Penning-Rowsell put it: 'To pick or not to pick is the most momentous decision in the winemaking year in Bordeaux.' This once timeless rhythm is now collapsing. Part of the problem is the climate crisis. Bordeaux still benefits from its moderate Atlantic climate. But south-west France is getting much hotter and drier. Even in the Gironde region, maximum temperatures have been close to 40C at times this past week. Adaptation, in the form of hardier grapes and greater crop diversity, feels unavoidable. A much larger challenge, however, is today's changing wine market. Demand for red wine in general, and for the full-bodied, long maturing red wines with generally high alcohol content that are synonymous with Bordeaux in particular, has slumped. This has affected not just the signature premiers crus in which monarchs and the global rich have always invested, but also the vineyards producing the ordinary Bordeaux red wines sold in supermarkets around the globe. For a region whose wine output is 85% red, this is an existential crisis. Bordeaux produces around 650m bottles of wine each year; but it currently sells only 500m. Demand for red wine in France has fallen by 38% in the past five years; in the 10 years to 2023 the fall was 45%. Nor is the slump confined to France. Demand in the Chinese market has halved since 2017. US tariffs will undoubtedly hit the 20% of Bordeaux exports that previously went across the Atlantic. These consumption changes are likely to be irreversible, at least in the short and medium term. A popular response for many would be to slash prices. Global Bordeaux prices soared outrageously in the Chinese boom years. But with consumers turning away in droves, and too many producers operating at a loss, price cuts have not reshaped the market. With aid from the French government and the EU, about 15% of Bordeaux vineyards have instead been dug up and put to new uses, including olives and kiwifruit, since 2019. In the nick of time, there is now a more traditional but also genuinely radical idea – to produce lighter and less tannic wines. History is on this idea's side. Bordeaux reds have been known for centuries in Britain as claret. But this much debated word dates from when England's Henry II and his descendants ruled in medieval Aquitaine. Back then, the reds of Bordeaux were often lighter, fresher wines known as clairet, somewhere between a modern red and a rosé, to be drunk young, which for the English meant soon after they arrived from their voyage from France. Small amounts of clairet are still produced in parts of the Bordeaux region even now. Today there are moves to expand production with the aim of winning new consumers who have rejected heavier reds. Clairet's advocates say it should be drunk within a couple of years and should be drunk chilled. Traditional claret drinkers will upend their decanters in disgust. But clairet sounds just the thing to accompany a barbecue over a warm summer weekend.