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The German government said it had clinched a “historic” cross-party deal to clamp down on illegal immigration and will explore setting up asylum processing centres outside the EU, as it tries to staunch support for resurgent rightwing populism.

The decision, reached early on Tuesday after 17 hours of discussions between chancellor Olaf Scholz’s coalition, the mainstream conservative opposition and Germany’s 16 state governments, follows an announcement by Italy that it will soon open migrant centres in Albania. 

Britain is the only European country to have established extraterritorial asylum centres, with a facility in Rwanda, but the process has been fraught with legal delays. Denmark is also working to set up a centre in the central African country. 

Germany’s new asylum package, which breaks months of deadlock on the issue, significantly scales back social benefits for refugees, increases federal financial support for state governments and sets ambitious targets to speed up deportations. “This is a very historic moment,” said Scholz, adding illegal immigration to Germany was an “undeniably great challenge”. 

Hesse prime minister Boris Rhein, a member of the opposition Christian Democratic Union and representing the 16 state governments, said the measures were a “step in the right direction . . . but it is also clear that further steps must follow”, reflecting the desire for stronger measures from some mainstream German parties. 

Supporters of the rightwing populist party AfD, which has a hardline anti-immigration policy © Thomas Lohnes/Getty Images

Pressure has grown on the federal government — which Scholz, a Social Democrat, heads in coalition with the Greens and Liberals — to take radical action over immigration, as broad social concern over the topic has fired support for the rightwing populist Alternative for Germany party (AfD). 

One in five Germans now say they support the AfD, whose hardline anti-immigration policy is the centrepiece of its platform. Parts of the party, which also advocates for a Ukraine-Russia peace deal and a reformed relationship with the EU, are under surveillance by intelligence services because of their extremist views and fascist sympathies. 

“In a very stressed and partly divided society, we are . . . now defining what the path can actually be so that we can come together again,” said Stephan Weil, prime minister of Lower Saxony.

Scholz said the accord would bring about a “massive change in practice” in asylum processing, with a series of legal changes to speed up claim processing and restrict applicants’ appeals.

The government will aim to reduce the time taken for an initial decision on applications down to three months and limit the subsequent legal appeals process to no more than three months. 

Asylum seekers will also now have to wait three years until they are entitled to full state benefits in Germany, up from 18 months currently.

Benefits will also be paid out on a special state-issued card, giving greater control over how asylum seekers use the money. 

The government will also legislate straight away to designate Georgia and Moldova as “safe countries of origin”, significantly raising the bar for asylum claims from their nationals.

Temporary border controls which have been enforced with fellow Schengen-member states Switzerland, Austria, the Czech Republic and Poland will be extended.

Funding had been a crucial sticking point in the negotiations. Berlin said it had agreed to now pay €7,500 per asylum application to the federal states, equivalent at current levels to about €3.5bn a year.

The government gave no timetable for its third-country processing proposals. The measure has garnered support from across the political spectrum in recent weeks. As well as senior politicians in the opposition CDU, Liberal and even Green officials have expressed qualified support, while Lars Klingbeil, co-leader of Scholz’s Social Democrats, expressed support for third-country measures on Monday.

Sceptics of the idea, who include the chancellor, believe it will not be workable because there are no viable host countries.

“Everything should now be carefully examined. In the end, not all solutions will probably be feasible,” said Scholz, adding that the coalition will “quickly” look at the options.

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