Economy, trade & finance: ROUNDUP: Companies get Corona economic aid longer

Federal Minister of Economics Peter Altmaier Bridging aid III is currently limited to the end of June. The ministries of economics and finance had negotiated an extension in the past few weeks.

According to dpa information, companies should in future receive personnel cost assistance if they take employees out of short-time work benefits or hire new employees earlier.

The restart help should therefore also be adapted. So far, the federal government has paid self-employed people in all branches of the economy who have high losses in sales but hardly any fixed costs, up to 7500 euros to help them get started again. The money is paid in addition to other services and is not counted towards it. This sum should be increased, it said. In future, self-employed individuals could receive up to 12,000 euros for the first three quarters of the year.

At the beginning of April, Federal Minister of Economics Peter Altmaier (CDU) spoke out in favor of extending Bridging Aid III for companies until the end of the year. Even if the lockdown came to an end, it would take a few months for economic life to normalize, he said at the time. Finance Minister Olaf Scholz (SPD) had signaled willingness to extend the aid. Business associations had also advocated it.

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With an extension of the aid until the end of the year, Altmaier could not prevail, also because the economy has picked up momentum in recent weeks. The background to the agreement on bridging aid is also that easier access to short-time working allowance is to be extended until the end of September.

With Bridging Aid III, companies and self-employed persons receive grants for fixed operational costs – such as rents and leases, interest expenses for loans, expenses for electricity and insurance. The prerequisite is a corona-related drop in sales of at least 30 percent. The comparison value is usually the respective month in 2019.

In April, the federal government also decided on an equity grant for companies that have suffered a drop in sales of more than 50 percent in at least three months since November 2020.

The extension of bridging aid III comes at a time when, in view of falling corona numbers and advances in vaccination, there is increasing relaxation in economic life, for example in restaurants and hotels.

Altmaier had only recently been more confident about the development of the economy in Germany. He now expects economic growth of up to four percent this year. The Minister of Economic Affairs said that Germany weathered the recession better than many expected.

The government had previously expected the gross domestic product to rise by 3.5 percent. However, supply bottlenecks and scarce raw materials are currently having a negative impact on many companies. Last year, economic output in Germany slumped by 4.9 percent as a result of the Corona crisis.

As the Ministry of Economic Affairs announced on Tuesday, a total of more than 105 billion euros in aid for the economy has been approved since the beginning of the Corona crisis, plus short-time working benefits of around 32.3 billion euros. An essential instrument of the state in addition to the bridging aid are loans to companies via the state development bank KfW. The aim of politics is to cushion the consequences of the crisis for jobs and companies.