German Government puts its money behind its words.

The German government will spend an extra €6bn (£4.4bn) to cope with this year’s record influx of refugees, the country’s ruling coalition has said.

State and local governments will receive €3bn to help them house the 800,000 people expected to arrive in Germany this year, and central government plans to free up another €3bn to fund its own expenses, such as paying benefits for the new arrivals.

Leaders from Angela Merkel’s coalition also agreed a other measures, such as speeding up asylum procedures and the construction of shelters.

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Germany expects to take in far more refugees than any other EU nation. In August, it registered more than 100,000.

The chancellor of Europe’s largest economy described the numbers crossing the border into Germany over the weekend as breathtaking, and said EU partners should share the burden of the influx.

“We have a weekend behind us that was moving, at times breathtaking,” she said. Efforts by ordinary Germans to support the new arrivals had “painted a picture of Germany which can make us proud of our country”.

“Germany is a country willing to take people in, but refugees can be received in all countries of the European Union in such a way that they can find refuge from civil war and from persecution,” Merkel said.

Bavarian authorities, which have so far accepted two-thirds of the 18,000 people who arrived in Munich via Austria over the weekend, have said they are at breaking point.

“We’re right at our limit,” said Christoph Hillenbrand, the president of the Upper Bavarian government. He called for better communication across borders after authorities were taken by surprise at the number who arrived on Sunday.

Hillenbrand said he was expecting a further 10,000 people to arrive by train in Munich on Monday.

Authorities in Bavaria are using a disused car showroom and a railway logistics centre as makeshift camps, and are adding another 1,000 beds to 2,300 already set up at the city’s international exhibition centre. About 4,000 people have been sent to other German states.

Five people were injured in a fire at a refugee shelter early on Monday, one of two such blazes to hit emergency accommodation centres overnight. Police were investigating the causes of the fires, which come after a spate of arson attacks on refugees’ homes.

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Hungary’s rightwing prime minister, Viktor Orbán, said on Monday that people seeking sanctuary in Europe should be seen as immigrants rather than refugees, because they were seeking a “German life” and refused to stay in the first safe country they reached.

Orbán also said the EU should consider providing financial support to countries such as Turkey that are near conflict zones so that people stay there rather than moving on.

He said talk of imposing quotas for how many migrants each EU country should take in was futile as long as Europe’s external borders were not secure.

The French president, François Hollande, said France would take in 24,000 refugees over the next two years and that without a unified EU policy to share the burden, the borderless Schengen system would collapse.

“If there is not a united policy, this mechanism will not work. It will collapse, and it will lead to a considerable influx and undoubtedly the end of Schengen, the return of national borders,” he told reporters in Paris.

The European commission is preparing to outline a proposal on Wednesday for mandatory quotas for EU states to relocate 120,000 refugees.

The UN said on Sunday that its humanitarian agencies were on the verge of bankruptcy and unable to meet the basic needs of millions of people because of the scale of the refugee crisis in the Middle East, Africa and Europe.

“We are broke,” the UN high commissioner for refugees, António Guterres told the Guardian.

The agreement that Germany’s coalition partners reached on Monday to manage the the influx of refugees included adding Kosovo, Albania and Montenegro to the list of countries deemed safe, meaning their citizens generally have no claim to asylum. Serbia, Macedonia and Bosnia are among the countries already on the list.

The aim is to speed up asylum and extradition procedures for migrants from south-eastern Europe and focus on those from countries such as Syria, Iraq and Afghanistan.

Merkel’s decision to allow thousands of refugees stranded in Hungary to find a new home in Germany has caused a rift within her conservative bloc. Her allies in Bavaria accused her of sending a “totally wrong signal”.

Austria said on Sunday it would close its border again, preventing people arriving from the Middle East and north Africa travelling through to Germany and raising the prospect of another buildup in Hungary.

“We have always said this is an emergency situation in which we must act quickly and humanely,” Reuters quoted the Austrian chancellor, Werner Faymann, as saying. “Now we have to move step by step away from emergency measures toward normality in conformity with the law and dignity.”