Economic institute says Merz's migration remarks hurting economy

There will be economic consequences from German Chancellor Friedrich Merz's statements on the negative impact of migration on German cities, the president of the German Institute for Economic Research (DIW) said on Wednesday.

"His recent remarks exacerbate societal polarization and cause significant economic damage," Marcel Fratzscher told the German business newspaper Handelsblatt.

"The chancellor's message weakens Germany's culture of welcome and will exacerbate the shortage of skilled workers in Germany in the coming years," Fratzscher said.

Merz had linked the state of German cities with migration and deportation policies and emphasized on Monday that he had nothing to retract.

Fratzscher said that the chancellor seems to see a problem in the fact that Germany is a country of immigration and that a city's image is naturally shaped by people with a migration background.

Second institute calls for more objective debate

Merz said last week that the federal government is correcting past failures in migration policy and making progress: "But we still have this problem in the image of the city, of course, and that's why the federal interior minister is facilitating and carrying out large-scale deportations."

This statement received much criticism - also from the junior coalition partner the Social Democratic Party (SPD) and partly from within his own conservative bloc's ranks.

The German Economic Institute (IW) urged for more differentiation in light of the heated discussion.

"It cannot be emphasized enough: In the migration debate, there is too little distinction between the immigration of skilled workers on the one hand and people who come to Germany for humanitarian or other reasons," the head of the IW's Berlin office, Knut Bergmann, told Handelsblatt.

That Germany economically needs the immigration of skilled workers is undisputed, Bergmann said.