SHARE
COPY LINK

ECONOMY

Germany says aid for coronavirus-hit firms ‘not endless’

Germany's generous support for companies hit by the coronavirus crisis can't go on indefinitely, Economy Minister Peter Altmaier said Thursday, warning of stricter rules to come from January.

Germany says aid for coronavirus-hit firms 'not endless'
Empty seats at a restaurant in Dresden on Thursday. Photo: DPA

A day after Chancellor Angela Merkel announced that Germany's current shutdowns would last until January 10th, Altmaier told broadcaster NTV that the massive aid pledged to help firms through November and December “cannot continue endlessly”.

READ ALSO: Germany's partial lockdown extended until January 10th

Merkel's traditionally frugal government has pledged over a trillion euros in aid to shield German workers and companies from the pandemic fallout, among the biggest rescue packages in Europe.

But Altmaier said it was wrong to think “the state can spend money without limits”.

A second coronavirus wave forced Germany to introduce another round of restrictions in November, shutting down bars, restaurants and hotels as well
as cultural and leisure centres.

Businesses hit by the closures are entitled to claim aid amounting to up to 75 percent of their revenues for November and December 2019, expected to cost
the government some €30 billion.

But from January, Altmaier said, the aid will once again be more targeted and largely focussed on reimbursing firms for their fixed business costs such as office rent or car and insurance payments.

Merkel late Wednesday also said that support for German firms could “not continue as in November and December”.

Altmaier urged Germans to “take a realistic view of the situation”.

“When you're going through one of the worst recessions since World War II, a lot of people are going to pay a price.

“We can make it easier,” he said. “But we cannot absorb the decline in economic activity and pretend nothing has happened.”

The government plans to borrow more than 300 billion euros in 2020 and 2021 to combat the pandemic impact, blasting through its constitutionally enshrined
“debt brake”.

It expects to return to its usual fiscal rigour in 2022.

READ ALSO: 'Arduous route' back to normality: German economy to shrink by 5.4 percent in 2020

Echoing Altmaier, lawmaker Eckhardt Rehberg, the budgetary expert from Merkel's conservative CDU party, on Thursday said the government “does not
have bottomless pockets”.

The goal to restore the “debt brake” — which limits new borrowing to 0.35 percent of gross domestic product — in 2022 is “ambitious enough”, he told Deutschlandfunk radio.

Germany anticipates that the economy will shrink by 5.5 percent in 2020 before rebounding next year, a less painful recession than other European countries are forecasting.

Member comments

  1. Businesses can’t survive if Germany allows its citizens/residents to not follow the rules right now.
    Aid is not wanted – we want to work!
    But if you allow people to “carry on” socially as if there is no pandemic…? Businesses/companies are forced to take drastic measures. Maybe people who think not social distancing, not mask wearing, and travelling on holiday etc. would behave differently if they lost their salary every month?

Log in here to leave a comment.
Become a Member to leave a comment.

CULTURE

‘People liked the silence’: How Berlin’s club scene is struggling after lockdowns

Berlin's clubs are suffering from staff shortages, a lack of guests... and neighbours who've grown used to the silence, representatives for the scene say.

'People liked the silence': How Berlin's club scene is struggling after lockdowns

Some operators from Berlin’s club scene are bracing themselves for a difficult autumn. For months now, people have been allowed to dance again and life has returned to normal in the dark corners of Berlin’s famous nightlife scene.

But the clubs have far from recovered from the pandemic. They face staff shortages, rising prices and the prospect of a return to Covid restrictions in the autumn.

“We go into the autumn with huge fear, because the omens are totally unfavorable,” said association head Pamela Schobeß.

Spring and summer went anything but smoothly, she said. “There has been an oversupply of events. People aren’t going out as much, and some are still afraid to move around indoors.”

Money is also an issue. “A lot of people are afraid of rising energy prices.”

The industry lost workers during the pandemic and it’s hard to convince them to come back with the outlook for the autumn looking so gloomy, Schobeß says.

Her colleague Robin Schellenberg tells a similar story. People have switched to various other jobs and would even rather work on a supermarket checkout, which may have been considered less sexy in the past. Now, he says, some have learned to love not having to work nights.

READ ALSO: 

Schellenberg runs the Klunkerkranich, a small club on a parking garage deck in Neukölln. Because a number of things have become more expensive, they have also had to increase their admission prices.

His impression is that people are going out less often and are deciding more spontaneously. In addition, people in the neighborhood are now more sensitive to noise. “Many people found the silence very enticing,” he said.

Some in the industry wonder what will happen next. Will club admission have to become much more expensive? Will that exclude people who can no longer afford it? And what happens if Covid infection numbers rise sharply?

If masks become mandatory indoors in October, Schobeß believes that would be bad for the clubs. “Even if we don’t get shut down by the state, we’ll actually have to close down independently ourselves,” she reckons.

Masks take all the joy out of the experience, she says. People have drinks in their hands and are “jumping around and dancing” and then security guards have to tell them “please put your mask on.”

The federal government is considering whether states should be able to make masks mandatory indoors starting in October. Exceptions should be possible, such as at cultural and sporting events, for people who have been tested, recently vaccinated and recently recovered.

In the event that Covid numbers soar, the states could then be allowed to tighten the rules and eliminate all exemptions.

READ ALSO: German court declares techno to be music

SHOW COMMENTS