MERKEL’S GAMBLE: German leader splurges on foreign aid as she faces £70bn migrant bill

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Angela Merkel is taking a political risk with her foreign aid policy

The under-fire Chancellor has signalled her intention to increase international aid spending to record levels even as the cost of her refugee policies spirals to a staggering £70 billion.

German spending on overseas payments skyrocketed to 19.4 billion US dollars in 2016 according to estimates by the SEEK Development think tank – an astonishing 40 per cent hike in just two years.

And the budget for Berlin’s aid ministry, the BMZ, has also ballooned by a bank-busting 15 per cent to 8.5 billion euros for this year, up from 7.4 billion in 2016.

The eye-popping spending increases come in part because Mrs Merkel is refusing to offset the rising cost of housing refugees as part of her international aid budget like other countries do.

Donor Tracker

Germany's aid spending has rocketed over the last two years

Donor Tracker

At the same time, the cost of housing refugees has spiralled

Germany is currently the third largest global contributor of international aid behind only Britain and the US, but it is on course to pass the UK within the next couple of years.

Berlin has already pledged to contribute an additional 8.3 billion euros to its foreign aid pot by 2019, whilst Britain’s yearly contributions are set to remain roughly stable at around £14bn a year.

However, critics will say she is taking a massive political risk at a time of growing frustration over the impact of her open door migration policy amongst ordinary German voters.

The beleaguered Chancellor has recently slumped behind socialist rival Martin Schulz in the polls, and she is also facing stiff opposition from the anti-immigrant Alternative fur Deutschland.

BMZ

Mrs Merkel has hiked the budget for Berlin's aid agency

Donor Tracker

Germany looks set to overtake the UK as the world's second biggest aid donor

And she is now facing a frantic fight for her political future, with people’s anger about high levels of immigration threatening to make her just another establishment figure to be toppled.

The German government sees international aid as an opportunity to increase its influence on the world stage, especially at a time when the US is becoming more insular under Donald Trump.

A similar argument was made by David Cameron to justify his lavish commitments to foreign spending, but critics have long argued that much of the money is wasted on pointless schemes.

We have already demonstrated that development policy can make a quick impact

German aid minister Gerd Muller

The law forcing the Government to spend 0.7 per cent of GDP on international aid became a constant thorn in the former prime minister’s side and a key point of attack for his political rivals.

When Germany’s aid budget was announced last November, Dr Gerd Muller said: "Through this 2017 budget, the German Parliament is sending a clear signal that international crises cannot be resolved without contributions from development policy.

“We have already demonstrated that development policy can make a quick impact. Through our cash-for-work programme, we have already created 40,000 jobs in the context of the Syrian crisis.

“But new answers and increased efforts are also needed in Africa. There, we focus on vocational training and improved capacity in the agricultural sector."

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With the new US President Donald Trump likely to slash America’s foreign aid programme – he has said only countries with compatible values should receive funding – it is possible Germany could soon become the world’s biggest donor.

Even if Mrs Merkel loses the election it is likely that the country’s aid programme will continue to grow under Mr Schulz, who has expressed repeated support for spending cash overseas.

Recent opinion polls show there has been a collapse in support for the Chancellor and a surge in favour of her rival, who is a political outsider in Germany despite his high-profile former role as European Parliament chief.

One survey for BILD newspaper even put Mr Schulz slightly ahead of Mrs Merkel by 31 per cent to 30 per cent. The pair will battle for the leadership of the EU’s biggest economy in a general election to be held this autumn.

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