The German government’s planned reduction in support for Ukrainian refugees is drawing sharp criticism from economists and integration experts, who warn of potential long-term economic repercussions and a setback for integration efforts. The proposed policy shift, known as the “circle of law change” threatens to curtail access to vital social safety nets and employment support for Ukrainian arrivals post-April 1, 2025.
Under the plan spearheaded by the ruling coalition, individuals arriving in Germany after the specified date will no longer qualify for Bürgergeld (basic income) or the forthcoming Grundsicherung (basic security) benefits. Instead, they will be limited to significantly lower asylum benefits, shifting responsibility for their welfare primarily to local municipalities and employment agencies. The legislative draft is slated for debate in the Bundestag this Thursday.
Marcel Fratzscher, President of the German Institute for Economic Research (DIW), voiced his concerns to the Süddeutsche Zeitung, arguing that the cuts will “hinder the integration of refugees into the labour market, ultimately increasing costs for the German state in the medium term”. He described the policy change as potentially “counterproductive” while acknowledging that the overall integration of Ukrainian refugees into the workforce has been, until now, largely successful.
The shift marks a departure from the current system, where Jobcenters – agencies equipped with specialized training and placement services – provide coordinated support for newcomers. Yuliya Kosyakova, from the Institute for Labour Market and Vocational Research, emphasized the critical role these Jobcenters play, stating that “people receive advice and targeted support at the Jobcenter to find work. This coordinated accompaniment is particularly important for newly arrived individuals”. Kosyakova cautioned that the new regulations are likely to yield “negative effects” and represent a challenge to a previously effective integration model.
Critics argue that by diminishing access to Jobcenter resources, the policy risks undermining the gains made in integrating Ukrainian refugees, potentially increasing dependence on social welfare and hampering the realization of their economic potential. The debate highlights a growing tension between the government’s desire to manage public finances and the need to ensure sustainable and equitable integration policies for those seeking refuge in Germany. The Bundestag debate this week is expected to be heated, with significant implications for the future of Ukrainian refugees in Germany.