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German firms apply for Kurzarbeit for nearly 12 million workers during coronavirus pandemic

The coronavirus crisis has prompted German firms to seek government-backed shorter hours schemes for a total of 11.7 million workers since March, official data showed Wednesday.

German firms apply for Kurzarbeit for nearly 12 million workers during coronavirus pandemic
An application form for the Kurzarbeit process. Photo: DPA

Known as “Kurzarbeit”, the measure – which has been widely copied abroad – tops up from government coffers the pay of workers placed on shorter hours by their employer, preserving the contractual relationship for the time when activity rebounds.

The government covers around two-thirds of the salaries of workers whose employers slash their hours after an agreement with the company's works council.

Companies must apply for the aid at their local branch of Germany's Federal Agency for Employment (Bundesagentur für Arbeit), which oversees the scheme.

In May, German companies applied to the Kurzarbeit scheme for a further 1.06 million people, the the BA Federal Labour Agency said. That adds to the 10.66 million people who were already registered on the programme since the start of the crisis.

Experience shows, however, that the number of people actually working reduced hours is significantly lower, because companies often seek to enter the scheme as a precautionary measure.

According to projections, 2.02 million people received payouts through the scheme in March alone – the month when the coronavirus lockdown began. This is the highest figure ever measured. The previous record dates back to May 2009, when 1.44 million people had taken advantage of short-time working during the financial crisis at the time.

READ ALSO: How to apply for Kurzarbeit in Germany when working hours are reduced

Unemployment up

Meanwhile the unemployment rate rose to 6.3 percent in May, the equivalent of some 2.8 million people, from 5.8 percent in April, the Federal Agency said.

Before the coronavirus outbreak, German unemployment had held steady at around 5.0 percent for a long time.

“The labour market is under severe pressure because of the corona pandemic,” said Detlef Scheele, Chairman of the Executive Board of the Federal Agency. “Kurzarbeit has clearly exceeded the level of 2009.

“Companies' demand for employees remains on a downward trend, but is no longer in freefall,” he added.

The shorter hours scheme is part of a trillion-euro economic support package decided as the pandemic broke over the country in March.

This week, Chancellor Angela Merkel's coalition government is hammering out details of a post-coronavirus relaunch plan expected to offer tens of billions of euros of new cash.

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COVID-19 RULES

Germany should prepare for Covid wave in autumn, ministers warn

German health ministers say that tougher Covid restrictions should come back into force if a serious wave emerges in autumn.

Germany should prepare for Covid wave in autumn, ministers warn

Following a video meeting on Monday, the health ministers of Germany’s 16 states said tougher restrictions should be imposed again if they are needed. 

“The corona pandemic is not over yet – we must not be deceived by the current declining incidences,” said Saxony-Anhalt’s health minister Petra Grimm-Benne, of the Social Democrats, who currently chairs the Conference of Health Ministers (GMK).

According to the GMK, new virus variants are expected to appear in autumn and winter. Over the weekend, federal Health Minister Karl Lauterbach (SPD) also warned that the more dangerous Delta variant could return to Germany. “That is why the federal Ministry of Health should draw up a master plan to combat the corona pandemic as soon as possible and coordinate it with the states,” Grimm-Benne said.

Preparations should also include an amendment of the Infection Protection Act, ministers urged. They want to see the states given powers to react to the infection situation in autumn and winter. They called on the government to initiate the legislative process in a timely manner, and get the states actively involved.

The current Infection Protection Act expires on September 23rd this year. Germany has loosened much of its Covid restrictions in the last months, however, face masks are still compulsory on public transport as well as on planes. 

READ ALSO: Do people in Germany still have to wear Covid masks on planes?

The health ministers said that from autumn onwards, it should be possible for states to make masks compulsory indoors if the regional infection situation calls for it. Previously, wearing a Covid mask was obligatory in Germany when shopping and in restaurants and bars when not sitting at a table. 

Furthermore, the so-called 3G rule for accessing some venues and facilities – where people have to present proof of vaccination, recovery, or a negative test – should be implemented again if needed, as well as other infection protection rules, the ministers said. 

Bavaria’s health minister Klaus Holetschek, of the CSU, welcomed the ministers’ unanimous call for a revision of the Infection Protection Act. “The states must be able to take all necessary infection protection measures quickly, effectively, and with legal certainty,” he said.

North Rhine-Westphalia’s health minister Karl-Josef Laumann (CDU) warned that no one should “lull themselves into a false sense of security”.

“We must now prepare for the colder season and use the time to be able to answer important questions about the immunity of the population or the mechanisms of infection chains,” he said.

On Tuesday, Germany reported 86,253 Covid infections within the latest 24 hour period, as well as 215 Covid-related deaths. The 7-day incidence stood at 437.6 infections per 100,000 people. However, experts believe there could be twice as many infections because lots of cases go unreported. 

READ ALSO: Five things to know about the Covid pandemic in Germany right now

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