Corona aid: Federal government wants to extend corona aid

Berlin Companies in need can prepare for further help from the federal government until the end of March 2022. In addition to Federal Economics Minister Peter Altmaier (CDU) and the federal states, the traffic lights around Federal Finance Minister Olaf Scholz (SPD) are said to have declared their willingness to do so. The negotiations between the SPD, the Greens and the FDP were still going on, the Handelsblatt learned from participants. But they are on the right track.

Specifically, it is about the continuation of Bridging Aid III Plus, including Restart Aid Plus and low-interest loans from the state-owned KfW Bank. With these, the state supports companies and self-employed who have experienced a slump in sales due to the corona restrictions. The aid would have expired at the end of the year.

14 of the 16 state economics ministers also support the project. The extension can also be found in the planned resolutions of the Bund-Länder-Round, which will take place on Thursday. But the extension must be decided at the end of the Bundestag.

Top jobs of the day

Find the best jobs now and
be notified by email.

There had been resistance in the upcoming traffic light coalition. According to Handelsblatt information, Scholz in particular is said to have initially slowed down an immediate extension of the aid. Bernd Westphal, who was the economic policy spokesman for the SPD in the last legislature, had said that the introduction of a 2G regulation could also have an impact on sales. 2G would only allow those vaccinated and recovered to access restaurants or shops.

Westphal had not spoken of a general rejection of an extension. But it is “currently forbidden to take quick action on the question of extending corona aid,” he told the “Business Insider” portal.

This causes displeasure among other politicians, including in the SPD. “It would be more of a ‘quick shot’ if you let the aid run out without knowing what the situation will be like at the end of the year,” said Saarland Economics Minister Anke Rehlinger to the Handelsblatt.

Torsten Herbst, who helped negotiate the economy chapter in the coalition agreement for the FDP, has a similar opinion. “I cannot understand that some social democrats want to endanger companies and jobs for no reason,” he said.

But there was also resistance from the Liberals. Economics Minister Bernd Buchholz (FDP) ensured that his federal state Schleswig-Holstein was one of the two deviants among the federal states. “For regulatory reasons, we have to make sure that this does not become permanent funding,” said Buchholz.

Possible concerns in Brussels

Scholz should now be open to a quick extension. Small changes in the bridging aids are not excluded, it is said from the traffic light parties. A major restructuring of the aid is considered unlikely. That would take too long and could quickly lead to problems with the EU Commission. Brussels makes sure that economic aid does not violate competition law.

However, on Thursday the EU Commission extended the fundamentals under state aid law, raised the upper limits and, above all, announced the introduction of two new funding instruments: “Investment aid for sustainable reconstruction” and “Liquidity aid”. Berlin could possibly get more leeway this way.

It is important for Scholz to extend the aid together with the short-time work allowance. His cabinet colleague Hubertus Heil (SPD) had already initiated this at the beginning of November.

The easier access to short-time working allowance and the maximum period of drawdown of 24 months are to be extended until the end of March. On the other hand, there should no longer be any increase in short-time work benefits from 2022.

The full reimbursement of social security contributions for short-time working is no longer planned, which employers still want to change. The general manager of the Association of Bavarian Business (vbw), Bertram Brossardt, said that they were in talks.

Economists support extension

Even economists, who some time ago warned against an extension of the financial aid, now support the extension. Many economists still consider it quite possible that a 2G regulation does not cause a drop in sales – but could increase it. The background to this is initial research, according to which many people avoid restaurants or shops because of political bans, but rather out of fear of infection.

A 2G regulation could give the vaccinated more security and compensate for the lack of sales by the unvaccinated, so the assumption. The economy Volker Wieland, for example, recently explained it that way.

Opponents of an extension worry about concealing which companies are in distress solely because of the pandemic – and in which areas the corona virus has only accelerated an ongoing structural change.

If, for example, retail sales in city centers have collapsed due to the corona lockdown and some customers remain loyal to online shopping in the long term, the state cannot support retailers in need forever.
The rapidly increasing numbers of infections are now pushing this concern into the background. “In the current, critical situation, the aid should continue,” Ifo President Clemens Fuest told Handelsblatt. “If businesses generate more sales through 2G than in the last wave of pandemics, the aid automatically decreases.”

Only companies whose turnover has plummeted by at least 30 percent as a result of the pandemic are entitled to bridging aid. Achim Truger also says: “You can’t let companies and employees down in the – hopefully – last wave of the pandemic.”

More: Comment: Booster, duties, freedoms: How Germany can still make it through the fourth wave

.
source site