Coronavirus: Germany plans €40 billion ‘rescue package’ for freelancers and small businesses

Coronavirus: Germany plans €40 billion 'rescue package' for freelancers and small businesses
Photo: DPA
The German government is planning a €40 billion aid package for freelancers and small businesses of up to 10 employees who are affected by the economic fallout from the coronavirus pandemic.

Around €10 billion of this is to be handed out as direct subsidies to ailing one-person businesses and micro-enterprises, while €30 billion will come in the form of loans, Spiegel Online initially reported. The amount and structure of the aid could change over the course of Thursday.

Up to five million self-employed people work in Germany, according to government estimates. Many of them have lost jobs or work due to the corona crisis in recent weeks.

Those most affected are the providers of so-called social consumption, such as smaller scale artists (Kleinkünstler) or musicians.

Grants for struggling employees and businesses

Called the Solidarity Fund (Solidaritätsfond), the new rescue fund is being organised by the Finance Ministry and the Economics Ministry

While the government plans to quickly distribute the grants, it will be checking in retrospect whether those who received them were eligible.

That means that, if deemed that the coronavirus pandemic did not have too adverse of an effect on their business, this aid could be converted into loans. 

However, these loans will have a low interest rate since they come from the government. 

Germany’s newly assembled “Corona Cabinet” will further flesh out the details of the funds later on Thursday, it was reported.

The new measure is necessary because self-employed people and small businesses may not take advantage of the liquidity aid presented last week by Finance Minister Olaf Scholz and Economics Minister Peter Altmaier, which was largely aimed at medium-sized or large enterprises.

North Rhine-Westphalia’s minister president Armin Laschet also announced on Thursday that the state government was freeing up €25 billion in state aid to secure jobs, with other states expected to announce their own economic measures to protect more jobs.  

READ ALSO: Germany unleashes biggest post-war aid package against coronavirus

Vocabulary

Rescue package – (das) Rettungspaket

Subsidies/grants – (die) Zuschüsse

Microenterprise – (das) Kleinstunternehmen

Loan/credit – (das) Darlehen

Fund – (das) Sondervermögen

We're aiming to help our readers improve their German by translating vocabulary from some of our news stories. Did you find this article useful? Let us know.

 
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