State financial aid for companies with corona-related sales slumps will be extended until the end of June. An agreement was reached in the federal government, as the Ministry of Economics announced on Monday on request. The bridging aid IV has so far run until the end of March. The aid, which is worth billions, is the federal government’s central crisis instrument to cushion the consequences of the pandemic on companies and jobs.
Companies with a corona-related drop in sales of at least 30 percent are supported. The comparative value is usually the respective month in the pre-Corona year 2019. Fixed operating costs such as rent and leases or expenses for electricity and insurance are reimbursed. The subsidy amount is staggered depending on the extent of the drop in sales.
Economics Minister Robert Habeck (Greens) spoke out in favor of gradual opening steps in the pandemic at the weekend. To protect the economy and employees, an extension of the Corona economic aid until the end of June, analogous to the regulations on short-time work benefits, is also necessary and sensible, according to the ministry.
Finance Minister Christian Lindner (FDP) also emphasized: “We need a gradual return to normality in Germany.” However, that does not mean that all measures can be shut down immediately. While the situation in gastronomy and retail can normalize quite quickly with the end of the 2G regulation, it will take some time in other sectors.
“Major events, events, trade fairs, cultural events need a lead time,” said Lindner. They would have to be planned, advertised, sold and carried out. “This means that new sales can only be achieved again after some time, even if there is a prospect of opening.” Therefore, an extension of the economic aid for a time makes sense. “But it is clear that they must come to an end,” he emphasized at the same time.
Habeck had already signaled that the bridging aid IV would be extended by three months. The federal government had previously extended the regulations for easier conditions for short-time work benefits by three months until June 30th.
A proposal for a resolution paper for the consultations on Wednesday, agreed between the Chancellery, the chair and co-chair of the Prime Ministers’ Conference, also states that the IV bridging aid will be extended until June 30 in order to provide companies with tried and tested support in uncertain times. The supplementary restart and hardship aid programs would be extended in parallel.
According to the Ministry of Economic Affairs, the system of bridging aid is designed to help and take action when necessary. If the economy picks up, the criterion of a 30 percent drop in sales ensures that only those companies that are still suffering from restrictions receive the help. The individual program conditions are currently being finalized.
The economics ministers of the federal states and associations had spoken out in favor of an extension. The president of the trades, Hans Peter Wollseifer, said that the omicron wave had led to “massive quarantine and illness-related absences from employees” in companies. Sales and order backlogs have fallen again in significantly more companies than in the summer and autumn. Therefore, affected companies are dependent on aid programs from the federal government beyond the first quarter.
According to an economic survey by the Association of German Chambers of Industry and Commerce (DIHK), the situation of companies in sectors particularly affected by the Corona crisis, such as hospitality and retail, has deteriorated significantly over the turn of the year. This is one of the reasons why the DIHK lowered its economic forecast for 2022.
Since the beginning of the Corona crisis, aid for the economy of around 78 billion euros has been paid out, as the Ministry of Economic Affairs announced last Friday. For this purpose, around 55 billion euros were granted in the form of loans. In addition, billions were spent on short-time work benefits. As of last Friday, funding of around 460 million euros was requested for bridging aid IV. In the case of bridging aid III and III plus, funds totaling 30 billion euros were paid out. (dpa)