Germany will extend its aid to businesses against the coronavirus pandemic until the end of September, despite the expected economic recovery in the country which is experiencing a sharp decline in infections, the government announced on Wednesday.
Read also: Deconfinement: the executive is preparing to reduce aid to companies and draws up its project for the post-crisis period
Partial unemployment and business aid programs will be maintained "
until September 30,
" announced several government officials after a cabinet meeting in Berlin. Until then, it was expected that direct aid, guaranteed loans, and partial unemployment, in place since spring 2020, will end on June 30. But "
the economic crisis is not yet over (...) and uncertainties remain
", justified the Minister of Labor, Hubertus Heil, during a press conference.
"
The recovery is different depending on the sector: events, catering or tourism, are still heavily weighed down
", and "
some branches (...) are held back by shortages,
" he said. Thanks to a drop in coronavirus infections, Germany gradually reopened its economy from mid-May, and hopes for a recovery in activity, after a drop of 1.8% of GDP in the first quarter. But the industry, pillar of its economic model, has been experiencing difficulties in sourcing raw materials for several weeks, which is slowing its recovery.
After an almost uninterrupted rise from April to December 2020, German manufacturing production fell by 1% over one month in April, after a mixed start to the year.
“
We must give clear perspectives
,” explained Hubertus Heil.
This extension of aid is, however, part of a context of growing concern in Germany vis-à-vis the massive sums spent against the crisis.
Read also: The main aids put in place to support businesses since March 2020
The extension of partial unemployment until September alone should cost "
2.6 billion euros
" to the federal state, according to the government. Germany has already paid more than 137 billion euros for direct aid and short-time working since the start of the health crisis. Added to this is a major economic stimulus plan, adopted a year ago. The country had to go into massive debt to release these sums, derogating from its budgetary balance rules enshrined in its constitution.