The rest of the European Union may need to follow Britain’s lead in setting new thresholds before EU migrants gain access to social benefits, according to Olaf Scholz, the mayor of Hamburg and one of Germany’s deepest thinkers about the implications of the refugee crisis.



Hamburg is on the frontline of the challenge to integrate tens of thousands of refugees, placing unprecedented pressure on schools and housing. It is expected that the city of about 1.8 million people will accept 40,000 refugees this year, double the number the UK has said it is willing to take in over five years. Tensions surrounding the housing of refugees are starting to rise.



Speaking to the Guardian, Scholz, a vice-president of the Social Democratic party and former government minister, stressed that he supported the free movement of labour within the EU, but said globalisation required the bloc as a whole to review its approach to access to benefits, regardless of the deal struck with the UK.

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His remarks underline the fact that the issue of welfare benefits will remain live throughout Europe even if the UK votes to stay in the EU in June. It is also a sign that Cameron’s largely failed attempt to make the UK renegotiation a catalyst for a Europe-wide rethink of the EU’s role has had some impact.



Last month, Cameron secured a temporary, UK-specific deal that will allow Britain to refuse access to in-work benefits for up to four years for new arrivals.

The UK was given the concession formally because unlike most large EU economies, it did not apply any temporary restrictions on access to the labour market when 10 countries, including Poland, joined the EU in 2004.

Scholz, in London to address the London School of Economics Anglo-German symposium, said: “It is now clear Europe is insufficiently prepared politically and legally to cope with a position where it is possible for 200 million men and women to set off and try their luck in another country.”

He said it was not possible to impose a single welfare system across the 28 EU member states, but added: “The EU is in real difficulty if only 5%-10% of its population should move to just a few states in search of work, with some failing to find it.”

With the rightwing, Eurosceptic Alternative for Germany (AfD) due to make progress in state elections, most German politicians are scrambling to find solutions to popular disquiet.

On EU benefits, Scholz, the mayor of Hamburg since 2011, said: “The sensible solution lies in linking the social benefits that EU citizens receive outside of their countries of origin with the work they have performed.”

Scholz proposed that an EU migrant would gain permanent access to a country’s benefits only if they have worked full-time for a year, receiving at least the minimum wage. In Germany, this is equivalent to an income of €1,470 (£1,144) a month.

He said the proposal “sends out a clear message: you can look for work anywhere. However, you do not have the right to choose the country in which you wish to receive social benefits. Support is due to those who have contributed to the national product. This solution honours the contributions of immigrants and also serves as an incentive to earn one’s living through labour.”

While it may be possible for Germany to make the proposed change unilaterally if it is ruled that this does not breach EU law, Scholz said, the current EU welfare system will not survive in an era of globalisation unless it is reformed in some way. “If we recognise that free movement of labour is one of the opportunities of the EU, and sometimes the best way to increase your income, it is necessary to be very careful how we organise that right,” he said.

“If we do not think about this now, in five or 10 years’ time, we may not be able to solve the problem because it has become too big and no one is willing to compromise.”

Germany did not have a major problem with “benefit tourism”, Scholz said, but “the welfare system means in Germany a family with two children will receive the same net income without working or paying for access to the health system. By comparison, in Greece there is no access to the health insurance system unless you are in work.”

He said that any pro-European “understands we have to do something”, adding that he had discussed his proposals with the European commission and “everyone is aware of the problem and that we need to find a solution”.

He defended the UK deal carved out for David Cameron, saying: “We needed a solution for Britain now.”

Admitting that the mood about refugees is changing in Germany, and that the EU has so far failed to find a collective solution to the crisis, Scholz said he expected that about 700,000 of the 1.1 million refugees who came to Germany last year would be accepted permanently. But he added: “We have to organise better and quicker ways to send people back.”

Hamburg is required to take in 2.53% of the refugees who come to Germany under a central scheme that takes into account the tax revenue and population of cities.

“The biggest problem is so many are coming so fast and it is very difficult to get planning permission to build the houses necessary. If I need 40,000 places this year, and I do, I need housing, and normally it is not possible to get planning permission for two years,” Scholz explained. Many refugees are being housed in temporary accommodation, creating fear among some in the city that ghettos might emerge.

About 30% of children in Hamburg are deemed to have a migrant background, and the pressure on schools has so far been managed by hiring more teachers.

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Scholz said AfD may do well enough in future elections to enter parliament. But, describing some of Europe’s rightwing populism as bad mood politics, he said: “The most astonishing fact that there are rightwing populist parties in countries that do not have economic problems. What are the problems in the Netherlands that help build these rightwing populist movements? It is one of the richest countries in the world – the same with Austria, Denmark, Norway and the same now with Sweden and Finland. Perhaps it is the idea that because they are in good economic shape, you might be in danger of losing something. I do not fully understand it.”

He made a strenuous effort to avoid interference in the UK referendum. “I am sure that if Boris Johnson retained the perspective of being mayor for the next 10 years, he would not have made the decisions he has,” Scholz said.