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.

Member comments

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


Munich sees sharp rise in Covid cases after Oktoberfest

Since the start of Germany’s Oktoberfest, the incidence of Covid infections in Munich has risen sharply. Though a connection with the festival can’t yet be proven, it seems likely.

Munich sees sharp rise in Covid cases after Oktoberfest

Two weeks after the start of Oktoberfest, the Covid numbers in Munich have more than tripled.

On Sunday, the Robert Koch Institute (RKI) reported an incidence of 768.7 for the city of Munich, though updated figures for the end of the festival are not expected until later in the week. Usually, on weekends and public holidays, there is a delay in reports.

In the entire state of Bavaria, the incidence value on Sunday was 692.5.

According to Munich’s public health officer, Beatrix Zurek, bed occupancy in Munich hospitals has also increased. Two weeks ago, 200 beds in Munich were occupied by Covid patients, whereas there are now around 350.

Though a relationship between the sharp rise in infections with Oktoberfest, which ended on Monday, can’t be proven at the moment, it seems very likely, according to experts. A significant increase in Covid incidences has also been shown at other public festivals – about one and a half weeks after the start. 

READ ALSO: Germany’s famed Oktoberfest opens after two-year pandemic hiatus

After a two-year break due to the pandemic, around 5.7 million visitors came to this year’s Wiesn according to the festival management – around 600,000 fewer than at the last Oktoberfest before the pandemic in 2019, when there were 6.3 million.

Federal Health Minister Karl Lauterbach (SPD) took to Twitter to comment on the rise in incidence in Munich during the Oktoberfest. “This would not have been necessary if self-tests had been taken before admission,” he said.

“Compared to the price of a measure of beer, €2-3 (for tests) wouldn’t have mattered,” he said.

Even before the start of the Wiesn, he had spoken out in favour of people taking voluntary self-tests. Lauterbach stressed that now is the time for special measures against Covid.

“The development shows what will happen if the states wait too long with the mask obligation in indoor areas,” he added.

READ ALSO: KEY POINTS: Germany’s new Covid-19 rules from October

In neighbouring counties, where many Oktoberfest visitors came from, the number of Covid cases has also risen noticeably.  Beatrix Zurek said that it is unclear, however, how much of a role Oktoberfest played in these figures, as people are currently much more active socially overall, with concerts and other events also taking place throughout the state.

Christoph Spinner, an infections specialist at Munich’s Klinikum, has urged people not to be alarmed by the rising numbers.

“We had expected rising incidences here. We knew that there could be a doubling, tripling, even quadrupling,” he said.

He said that this is no cause for concern, as many people have been vaccinated or have also recovered from previous Covid infections, so any new infections are therefore usually mild.

The virologist advises people over 60 or with pre-existing conditions to get a second booster vaccination, but otherwise said people shouldn’t be alarmed by the rising incidences.