Coronavirus: Germany to give stricken small firms up to €50,000 a month

Germany's economy ministry on Monday unveiled plans to ramp up support for hard-hit smaller companies, proposing as much as €50,000 in monthly aid to help the nation's vaunted "Mittelstand" survive the coronavirus crisis.

Coronavirus: Germany to give stricken small firms up to €50,000 a month
An employee at the firm Dürr AG in Bietigheim-Bissingen, Baden-Württemberg assembling a robot used for painting. Photo: DPA

The proposal, seen by AFP, is currently being discussed with the finance ministry and is aimed at helping firms cover their fixed costs from June to December as the pandemic pushes Europe's top economy into its worst recession in decades.

“Time is running out for some companies,” a spokeswoman for Economy Minister Peter Altmaier said.

To qualify for the support, applicants must prove that their revenues plunged by at least 60 percent year-on-year in April and May, when the impact of the coronavirus lockdowns hit hardest.

The aid, up to a maximum of 50,000 a month, would be available to freelancers and companies that employ up to 249 workers.

The plan is expected to cost the German state some 25 billion by August, the economy ministry's proposal showed. The total price tag will depend on how the country copes with the virus in the later months of the year.

Germany has already launched a huge rescue package worth 1.1 trillion to steer the country through the coronavirus-induced downturn, even ditching its cherished policy of maintaining a balanced budget to finance the stimulus.

READ ALSO: Germany plans €40 billion 'rescue package' for freelancers and small businesses

The massive package includes state-backed loan guarantees, cash injections and schemes to put millions of workers on reduced hours to avoid layoffs.

Having weathered the coronavirus outbreak better than many of its neighbours so far, Germany has gradually started loosening restrictions in recent weeks.

Shops, factories and restaurants are cautiously reopening but the economic damage is far from over as social distancing rules prevent a return to business as usual.

Economy Minister Altmaier's latest plan is specifically targeted at supporting Germany's “Mittelstand”, the tens of thousands of small- and medium-sized firms considered the backbone of the country's economy.

Many of them make highly specialised products for niche markets, such as high-tech parts for medical devices or factory equipment, making them crucial to Germany's success as an export champion.

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Bavaria pushes for stricter Covid regulations in autumn

Health ministers across Germany's 16 states are debating the government's new Covid plan - and politicians in Bavaria say they want more clarity.

Bavaria pushes for stricter Covid regulations in autumn

On Tuesday, federal and state health ministers planned to discuss the Covid protection proposals for autumn and winter presented last week by Health Minister Karl Lauterbach (SPD) and Justice Minister Marco Buschmann (FDP).

However, some states and politicians are not satisfied with the plans. 

Under the proposals, masks will remain mandatory in air and long-distance transport, as well as clinics, nationwide. But federal states will be able to choose themselves whether to introduce further measures like mandatory masks on public and regional transport.

States will also have the power to take tougher Covid measures if the situation calls for it, such as mandatory masks indoors, but lockdowns and school closures have been ruled out. 

READ ALSO Masks and no lockdowns: Germany’s new Covid plan from autumn to Easter

The draft law states that there can be exceptions from wearing masks in indoor spaces, such as restaurants, for recently Covid-vaccinated or recovered people. 

But Bavaria’s health minister Klaus Holetschek (CSU) told DPA that these planned exemptions were not justified because vaccinated and recovered people can still transmit infections. “There are clear gaps in the current draft law,” said the CSU politician.

Dominik Spitzer, health policy spokesman for the FDP parliamentary group in the Bavarian state parliament, also questioned this exception, saying the rules “simply made no sense”.

“With the current virus variant, that would be impossible to convey, since even vaccinated people can continue to carry the virus,” the FDP politician told Bavarian broadcaster BR24. 

The coalition government’s graduated plan under the new Infection Protection Act, is set to be in force from October 1st until April 7th next year. 

The powers for the states are a first step, “but they do not go far enough for us”, Holetschek added, while calling for some points to be tightened up. “We need strong guidelines for autumn and winter.”

Holetschek said the government needed to tighten up the criteria with which states can adopt and enforce more effective measures to protect against the spread of Covid-19.

READ ALSO: Could Germany see a ‘patchwork’ of Covid rules?

Meanwhile, CDU health politician Erwin Rüddel said Germany was on the “wrong track” and the country should find “a completely different approach” to Covid policy than it has so far.

He accused the coalition government of being in “panic mode” and said he doubted the Bundestag would pass the proposals.

“I believe, there will be significant changes (to the draft)”, he said.

But the chairperson of the doctors’ association Marburger Bund, Susanne Johna, backed the plans.

“The proposal for the new Infection Protection Act gives the states sufficient possibilities to react adequately to the infection situation,” Johna told the Rheinische Post on Tuesday.

“The states can take regionally adapted measures to protect people if the need arises. I can’t understand why this concept is being called into question right away.”