Germany plans €17 billion aid to companies and freelancers for extended shutdown

The German government plans to set aside a massive aid package for firms and self-employed people this December.

Germany plans €17 billion aid to companies and freelancers for extended shutdown
A woman walking past a restaurant in Hanover on Monday. Photo: DPA

It came as negotiations continued ahead of crunch talks between the government and the states.

Under the state premiers' proposals, the partial lockdown across Germany will be extended until December 20th.

A final decision is expected to be taken during the consultations with Chancellor Angela Merkel and the states on Wednesday.

If the partial lockdown is extended, restaurants, bars and cafes as well as leisure and cultural facilities – which have been closed since November 2nd – will remain shut.

READ ALSO: Groups of 10 and no fireworks ban – German states propose Christmas and New Year rules

Will there be financial support?

The government has promised support to companies affected by the closures.

So far authorities have earmarked around €14 to €15 billion to compensate for lost turnover in November.

The support is for affected businesses, such as bars and restaurants or self-employed artists.

Companies with up to 50 employees and self-employed people are to be compensated for 75 percent of the loss of turnover, based on their November 2019 takings. For larger companies, the percentages are determined in accordance with European guidelines on state aid law.

The application process for claimants is expected to begin over the course of this week, and the funds are to be allocated to those affected by the end of the month.

The money is to come from a pot set aside for ongoing 'bridging aid' during the pandemic.

The Pino restaurant in Frankfurt has turned to showcasing pandas instead of customers as part of their 'Pandamie' bears protest on the shutdown. Photo: DPA

It is not yet clear what the new aid for December will look like. According to reports, the December financial aid would be based on the model of the November package, and worth around €17 billion.

However, it's unclear whether a 75 percent loss of turnover will be granted again.

'Reserves have been used up'

The federal government has already taken on huge debts to protect companies and jobs during the coronavirus crisis.

Business representatives say the support is badly needed to keep the economy ticking over. They are also worried about the November aid reaching people.

“Extending the November aid is important in order to give businesses a chance of survival. The reserves have been used up,” said Ingrid Hartges, the chief executive of the hotel and catering industry association Dehoga, on Tuesday.

“We need concrete information, including details of the November aid, when the money will be paid out, because not a cent has been paid out yet. The fact that the closures will now continue until December 20th naturally exacerbates the situation”.

The Federal Association of Small and Medium-sized Enterprises (Bundesverband mittelständische Wirtschaft) called for improvements to the support process.

This mainly concerns companies that are indirectly affected by closures, for example in the catering industry. Federal Managing Director Markus Jerger said that the federal and state governments must finally make a binding declaration on how the aid for ailing companies should be paid out in November and continued in December without red tape.

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Pandemic in Germany unlikely to end this year, says top virologist

High profile German virologist Christian Drosten believes Germany will see a severe spike in Covid infections after summer, and that the pandemic will not become endemic this year.

Pandemic in Germany unlikely to end this year, says top virologist

Drosten previously said that Germany would probably be able to declare the end of the pandemic this year.

But in an interview with Spiegel, Drosten said he had reevaluated his opinion. 

“When the Alpha variant came, it was very surprising for me. When Delta appeared I was sceptical at first, then with Omicron we had to reorient ourselves again. And since January there have already been new Omicron subtypes.

“So I would actually like to correct myself: I no longer believe that by the end of the year we will have the impression that the pandemic is over.”

READ ALSO: End is in sight for pandemic in Germany, says virologist 

Drosten also said that Germany will not see a largely Covid-free summer, which has been the case in previous years, and a further increase in infections in autumn. 

“We are actually already seeing an exponential increase in case numbers again,” Drosten said.

“The BA.5 variant (of Omicron) is simply very transmissible, and people are losing their transmission protection from the last vaccination at the same time.”

In other countries, he said, when the number of cases become high, hospitalisation and death rates also rise again. “Unfortunately, that will also be the case here,” said Drosten, but added: “Overall, however, far fewer people will become seriously ill and die than in 2021.”

Drosten said he expected many more infections from September.

“I hope that the school holidays will dampen the increase in cases somewhat. But from September, I fear we will have very high case numbers,” the head of the virology department at Berlin’s Charité hospital told Spiegel.

READ ALSO: German Health Minister lays out autumn Covid plan

Virologist Christian Drosten at a Covid press conference in 2021.

Virologist Christian Drosten at a Covid press conference in 2021. Photo: picture alliance/dpa | Kay Nietfeld

If the government does not take any action, he predicted there would be a lot of sick leave across all industries. “That will become a real problem,” he said.

Drosten said he did not expect overcrowded intensive care units in Germany.

But the new BA.5 sub-variant, which is becoming dominant in Germany, may affect people more strongly. 

“The wheel is turning more towards disease again,” said Drosten. It is not true that a virus automatically becomes more and more harmless in the course of evolution. “That makes me even more worried about the autumn,” he said.

Drosten recommends wearing masks indoors during the colder months, saying it is “the least painful” measure.

If, in addition, “up to 40 million people could be immunised or given a booster vaccination” before winter, for example by urgently calling for company vaccinations, that would “really make a difference”, Drosten said.

In the long term, he said it’s inevitable that people will become infected with coronavirus.

He said the population immunity due to vaccinations and infections will at some point be so strong that the virus will become less important. “Then we will be in an endemic state,” said Drosten. In the worst case, however, this could take “several more winters”.

However, Drosten warned against people trying to deliberately infect themselves with Covid, saying getting the infection in summer doesn’t mean people will be protected in winter. 

Drosten himself said he has not yet contracted Covid-19.

“So far, I guess I’ve just been lucky,” he said. “I rarely put myself in risky situations, but I’m not overly cautious either.”

‘Pandemic depends on behaviour’

According to the Robert Koch Institute (RKI)’s latest weekly report, more outbreaks are occurring in care homes, and the number of patients in intensive care units is slightly rising as infections go up. 

The institute said there had been a 23 percent increase in the 7-day incidence compared to the previous week. On Friday the 7-day incidence stood at 618.2 infections per 100,000 people. There were 108,190 infections within the latest 24 hour period and 90 deaths. 

“The further course of the pandemic depends not only on the occurrence of new virus variants and the uptake of vaccinations on offer, it also depends to a large extent on the behaviour of the population,” said the RKI.

According to the DIVI intensive care register, the number of Covid-19 patients in ICUs had increased to 810 on Thursday this week, from about 600 at the beginning of the month.

However, that number is still low compared to previous Covid peaks when thousands of people were in intensive care in Germany.