Corona Crisis: Germany decides financial rescue package worth billions

style="float: right; margin-bottom: 10px; font-weight: 600;"Mon 23rd Mar, 2020

To mitigate the consequences of the corona crisis for businesses and citizens, the German federal cabinet has decided on an unprecedented aid package. A supplementary budget with new government debt of 156 billion euros is planned.

According to the German Federal Finance Minister Olaf Scholz (SPD), this package has "an order of magnitude that has not yet been reached".

The minister spoke of a necessary and correct step. On the one hand, the decline in economic output, which is expected, will lead to lower tax revenues of around 33.5 billion euros, on the other hand, the state will have to spend 122 billion euros more - for health care, for citizens with loss of income, for jobs and companies. Chancellor Angela Merkel (CDU) was connected to the meeting by phone - she herself is in quarantine as one of her doctors was tested positive for Corona.

The package of measures is designed to protect citizens and businesses from losing their livelihoods due to the crisis. Among other things, Scholz promised comprehensive help in the event of loss of income. According to this, parents of children under the age of twelve are also entitled to compensation of 67 percent of their lost earnings if they are unable to work due to a lack of childcare.

Aid amounting to 50 billion euros is provided for small businesses and the self-employed. Federal Minister of Economics Peter Altmaier (CDU) said this protective shield was unprecedented in German post-war history. Aid should be paid out quickly. For small businesses with up to five employees, there will be 9,000 euros for three months, for businesses with up to ten employees 15,000 euros. In this way, the federal government ensures that these entrepreneurs can pay for ongoing obligations, said Altmaier. Around ten million people are employed in this area in Germany.

Larger companies should be able to be strengthened with capital through a stabilization fund.

With extended regulations on short-time work, it will also be made easier for companies to keep their employees instead of sending them into unemployment.

In addition, landlords should no longer be allowed to give notice to their tenants if they cannot pay their rent due to the Corona crisis.

In order to being able to implement the aid package as quickly as possible, the German Bundestag is to approve it on Wednesday. The Federal Council is to deal with the measures on Friday.

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