Germany's economy has been hit hard by the Corona crisis. In order to help medium-sized companies in particular, a new quick credit program has now been decided.
- The corona virus crisis poses gigantic problems for the German economy.
- Headlines recently made delicate plans for large retailers - but the auto industry is also suffering.
- You can find the most important information on the general status of the epidemic in Germany in our news ticker.
10.30 p.m .:
Interrupted because of the spread of the coronavirus
airbus
its production in
Bremen and Stade
. "With these measures, the company is reacting to various circumstances related to the Covid 19 pandemic," the company said on Monday. Production is also temporarily stopped at the US location in Mobile (Alabama).
The inventories at the locations are high. The group also referred to “recommendations from the respective governments and requirements that affect different phases of the entire industrial production flow”.
Production and assembly work in the civil aviation division has been suspended in Bremen since Monday to April 27, the aviation and armaments company continues. In Stade the break already started on Sunday and will last until April 11th.
BMW feels bad consequences of Corona - carmaker publishes drastic figures
4:20 p.m .: BMW sold 20.6 percent fewer cars from January to the end of March than in the first quarter of last year. The corona pandemic caused sales in China to collapse in February, and the consequences in Europe and the USA were clearly noticeable in March, the company said on Monday in Munich. "In Europe, around 80 percent of all dealerships are currently closed due to the corona virus, and around 70 percent in the United States."
Production is in the BMW plants in Europe and North America . The group is adapting its production volume flexibly to demand, said sales director Pieter Nota. "In China, we see the first signs of a recovery with a strong order intake." The most important thing now is to ensure the health of the employees, the liquidity and the long-term success of the company.
In the first quarter, the group sold only 477 111 BMW, Mini and Rolls-Royce brands. Sales slumped 31 percent in China, 18 percent in Europe, and 17 percent in the United States.
German economy in corona crisis: fast credit program should help - state is liable
2.45 p.m .: As finance minister Olaf Scholz (SPD) and economics minister Peter Altmaier (CDU) have announced in a press conference, the federal government has decided in the corona crisis additional help for medium-sized companies. With a new loan program, especially medium-sized companies are to be provided with urgently needed loans more easily. The aim is to enable small and medium-sized companies to “get through the difficult times, that they are still there economically when things go up again,” says Scholz.
He pointed out that the aid from the 50 billion program for these companies is tied to banks' review decisions. "Perhaps time goes by that not everyone has." The now approved quick loan program provides that the banks can grant loans without checking the further development of the respective company.
"The decision is: Anyone who has been economically active in the past year, who has had sales in the past year, who has performed a proper business activity in the past year and who has made a profit can also get three monthly sales as a loan from the bank " , continues Scholz. The federal government guarantees this loan 100 percent, so that it is no longer necessary for the bank to make its own assessment. "And with this 100 percent guarantee, it is then also possible that this can be achieved very quickly," the press conference continues.
The federal government expects that many companies will use this opportunity, said the finance minister. "These quick loans are designed to ensure that these medium-sized companies quickly have liquidity without, as it were, taxpayers losing too much money ."
Economy in corona crisis: new loan program should help - inform Scholz and Altmaier
14.06: In a press conference, Finance Minister Olaf Scholz (SPD) and Economics Minister Peter Altmaier (CDU) now inform about the new loan program, which is intended to provide relief especially for small and medium-sized businesses .
The German government wants to prevent a wave of bankruptcies among small and medium-sized companies with quick and uncomplicated loans from the state development bank KfW. According to a meeting of the Corona Cabinet, small and medium-sized companies should be able to receive loans of up to 800,000 euros , depending on their size, without a risk assessment and with 100 percent state liability.
Chancellor Angela Merkel advises on the corona virus with the crisis cabinet. It is also about Horst Seehofer's plan to expand the current measures.
Economy in corona crisis: New German loan program to help - State is liable
Update from April 6, 12:25 p.m .: The federal government wants to use a new loan program to provide SMEs with urgently needed loans more easily, thereby preventing a wave of bankruptcies . As the key points of the program show, loans of up to EUR 800,000 per company are to be secured with a 100 percent state liability.
Accordingly, the companies must not have been in difficulty as of December 31, 2019 and must have "orderly economic conditions". The cornerstones of the program are available to the German Press Agency.
The "Corona" cabinet wanted to end the additional program on Monday. In the early afternoon (2:00 p.m.), Finance Minister Olaf Scholz (SPD) and Economics Minister Peter Altmaier (CDU) want to inform about the new support measures for SMEs.
The state development bank KfW has so far borne up to 90 percent of the credit risk in the special loan program. There have been repeated complaints from the business community that credit checks by the house banks are too complex and no loans are being granted because companies are not creditworthy in the current crisis. Business associations had also complained of a "funding gap" for small and medium-sized companies in previous programs.
Economy in corona crisis: Economics minister harshly criticizes banks - stimulus plans planned
Update of April 5, 1:11 p.m .: Leading coalition politicians have promised comprehensive economic stimulus measures to get the German economy out of the crisis after the Corona pandemic has subsided. CSU boss Markus Söder spoke out at the weekend for a large stimulus package that had to be flanked by nationwide tax cuts. Federal Finance Minister Olaf Scholz (SPD), who will be visiting Anne Will in the evening, also advocated an economic stimulus package; he hopes that this will boost the climate-friendly restructuring of the economy (see the update of April 4).
Scholz and Söder did not give any numbers. However, they made it clear that the targeted economic stimulus package had to be very massive. The first emergency measures already decided by the federal government have a volume of well over half a trillion euros.
Austria already has it, the obligation to wear a mask. But does it also come in Germany? *
Economy in corona crisis: Economics minister criticizes banks hard - "not sense of the exercise"
15:29: In view of the severe turmoil in the economy due to the Corona crisis, the Federal Government wants to improve its offer of help. Federal Minister of Economics Peter Altmaier (CDU) reprimanded the banks on Saturday for their reluctance to grant loans to companies and announced remedial measures. Federal Finance Minister Olaf Scholz (SPD) held out the prospect of further tax relief for companies. Minister Altmaier admitted problems in granting aid loans to companies and sharply criticized the business practices of German banks . On the Internet broadcast "Bild Live", he complained that some banks refused to give financial aid to companies in need - despite the loan programs launched by the federal government.
"That is not the point of the exercise," said Altmaier. "There are some who say we don't give you a loan because we don't know how long you can't produce ." It is exactly "the aim of this program that this time can be bridged". Fundamentally, when checking the collateral, the financial institutions should make sure that "the church remains in the village".
The federal government's aim is "to create clarity over the next few days to ensure that all medium-sized companies get the money they need to secure their companies, their jobs," said Altmaier.
Chancellor Angela Merkel is now advising the Cabinet of Crisis on further corona measures in Germany. *
Corona crisis: Bayer creates large stocks of tablets
Update from April 4, 11:05 a.m .: In the fight against the corona virus, the German pharmaceutical company Bayer relies on its malaria drug Resochin, which it had developed decades ago: The group had a total of 600,000 tablets containing the active ingredient chloroquine delivered to Germany and safely stored there as reported by the "Bild" newspaper on Saturday. Bayer now produces the drug "exclusively for the common good" and passes it on to governments "free of charge in times of crisis," Bayer CEO Werner Baumann told the newspaper.
Baumann said to the broadcaster n-tv on Saturday: "Existing medications are the greatest hope." Medicines that still had to be developed would not be available on time and in sufficient quantities . Resochin, on the other hand, is immediately available. "And we will do everything we can to produce this medication in sufficient quantities if it should actually be effective," said Baumann in n-tv.
Resochin is the Bayer trade name for the active ingredient chloroquine. The drug for malaria prophylaxis , which was developed in the 1930s, has been under discussion for several weeks after tests on cell cultures have shown an inhibition of the multiplication of the novel coronavirus, which can trigger the lung disease Covid-19.
Corona crisis: Scholz plans stimulus package
Update 5:04 pm: According to a report by "Spiegel", Federal Finance Minister Olaf Scholz (SPD) is planning an economic program for the period after the Corona crisis in order to get the economy going again. There is talk of a powerful push package of almost EUR 50 billion for what Scholz calls the "second phase" of the crisis, the magazine reported. Both additional state investments and facilities for companies are planned.
The program is to be financed by using funds from the federal reserve for asylum seekers and refugees that have not previously been needed. In order to strengthen private as well as government investments, investment grants for companies and discounts are under discussion.
In addition, according to "Spiegel", Scholz initially wants to forego saving the expenses for the billions of euros currently available immediately after the crisis. "The worst thing would be to save in a crisis against the crisis," the magazine quoted the finance minister. "We have to do the opposite."
The federal government had approved a supplementary budget with new debt of 156 billion euros to deal with the consequences of the crisis for the current year. However, it is very uncertain whether this will suffice and long-term burdens are also to be expected. With the supplementary budget, the principle of the black zero in the federal budget was abandoned for the first time in years.
Economy in corona crisis: Puma wants to cut dividend and hold annual general meeting digitally
Update from April 3, 4:03 pm : The sporting goods manufacturer Puma wants to suspend the dividend because of the corona crisis. The MDax company announced on Friday in Herzogenaurach in Bavaria that the board of directors would make a corresponding proposal to the general meeting because of the "strongly negative effects" on its business.
In addition, the board should initially forego 100 percent of its salaries in April . After that, the situation will be reassessed, a spokesman said on request. In addition, Puma will now hold its Annual General Meeting planned for May 7th digitally. The first quarter earnings release date will be postponed by a week from April 30 to May 7.
Coronavirus pandemic: no normality - Lufthansa extends crisis mode
Update 4:58 p.m .: Lufthansa has extended its fuselage flight schedule by two weeks until May 3 due to the corona crisis. All previous flights from the regular schedule have been canceled by this date.
The fuselage flight schedule ensures 18 intercontinental flights to and from Frankfurt as well as 50 daily connections between German and other European cities. This basic service corresponds to around five percent of the usual traffic.
Treasury postpones budget for corona pandemic
Update 4:08 p.m .: The Ministry of Finance is postponing its schedule for drawing up the federal budget for 2021 due to the corona pandemic. "As things stand at the moment, no one can say reliably how quickly the measures to combat the pandemic will take effect," states a letter from State Secretary Werner Gatzer to the State Secretaries of the Federal Ministries that is available. The government's draft budget should only be presented to the cabinet in September.
Meanwhile, the Federal Government is supporting innovative and promising start-ups in the corona crisis with an additional package worth billions. The venture capital financing is to be expanded with two billion euros , as announced by the Ministry of Finance and the Economy on Wednesday in Berlin.
Corona crisis: Altmaier expects economic slump by over eight percent per month
Update 2:59 p.m .: Federal Minister of Economics Peter Altmaier (CDU) expects economic output to fall in the coming weeks. "In individual months in the first half of the year," a slump of more than eight percent is possible, said Altmaier in Berlin. To quantify exactly the "considerable consequences" of the coronavirus is still "irresponsible" at the moment.
Update 1:14 p.m .: Representatives of the German auto industry discussed in a conference call with the federal government how car manufacturers and their suppliers can get out of the Corona standstill . As the Handelsblatt reported on Thursday, the bosses of the car groups Volkswagen, Daimler, BMW, Opel and Ford spoke for about an hour on Wednesday evening with Chancellor Angela Merkel (CDU) and several ministers.
The belts in the factories of the car manufacturers and important suppliers are currently at a standstill in the corona crisis. Tens of thousands of employees are affected by short-time work, and dealerships have had to close their sales rooms.
According to Handelsblatt information, German car manufacturers are "liquid for a few more months", but are concerned about their supply chains. Accordingly, "many suppliers are threatened with financial collapse in the coming weeks". The auto companies are preparing to protect strategically important suppliers in an emergency, as the newspaper reported, citing industry circles.
Companies in Italy and Spain are particularly at risk, where, in addition to health systems, the economy is particularly hard hit by the corona virus. According to the carmaker, "generous help" is necessary for both countries.
According to the Stuttgarter Zeitung and Stuttgarter Nachrichten (Thursday editions), the VDA and the IG Metall trade union have drawn up a debt paper to the government in this connection. In addition to Merkel, according to Handelsblatt , economics minister Peter Altmaier (CDU), finance minister Olaf Scholz, labor minister Hubertus Heil (both SPD) and transport minister Andreas Scheuer (CSU) also took part in the conference call.
Economy in corona crisis: Bayer also wants to produce possible Covid-19 active ingredient in Europe
Update from April 2, 11:02 am: It will take time to launch a vaccine against the novel coronavirus disease Covid-19 . However, experts are soon expecting a drug. The German pharmaceutical and chemical group Bayer is now also creating production options in Europe for the active ingredient chloroquine, which appears to be helpful in the fight against the lung disease Covid-19.
Bayer CEO Werner Baumann announced in an interview with Handelsblatt on Thursday that production facilities in Europe should also be adapted for the production of the drug Resochin with the active ingredient chloroquine . So far, the product that Bayer wants to donate to governments free of charge in the crisis has only been produced at one location in Pakistan.
The drug for malaria prophylaxis, which was developed in the 1930s, has been under discussion for a few weeks after tests on cell cultures have shown an inhibition of the proliferation of the novel coronavirus , which can trigger the lung disease Covid-19 . "There are indications that Resochin reduces the viral load in the laboratory and in initial clinical tests," Baumann told the newspaper. However, further clinical studies are necessary to clarify the relationship between benefit and risk . These would now be started by the World Health Organization, among others.
Corona: Volkswagen extends plant closure
Update from 9:35 p.m .: The day before yesterday, Volkswagen announced the ten-day extension of the plant closings in Germany, now the next damper follows at the end of the first quarter of the year. The automotive company from Lower Saxony clearly felt the consequences of the corona pandemic on the US market.
With 75 075 cars, dealers sold 13 percent fewer vehicles than in the previous year. The company announced on Wednesday. . Between January and February, sales increased 9.4 percent, but in March they slumped 42 percent due to the spread of Covid-19 lung disease. Auto factories are now also at a standstill in the US sales market, and car dealerships have closed. VW subsidiary Porsche also sold 11,994 cars in the first quarter, 20.2 percent fewer vehicles than in the same period last year.
Update from 16.55 : The department store group Galeria Karstadt Kaufhof has applied to the Essen District Court for a protective shield procedure in view of the loss of sales due to the corona pandemic . The company announced on Wednesday in Essen.
Economy in corona crisis: Lufthansa sends 87,000 employees on short-time work - "It no longer makes sense ..."
Update of April 1, 12 noon: The Lufthansa Group continues to operate on only around five percent of its previous performance. Internationally, the corona crisis hit aircraft companies and tour operators first. The Group has now announced that around two thirds of its workforce worldwide will be working short-time. A total of 87,000 people are affected. "For commercial reasons, flying no longer makes sense at these times," said Lufthansa CEO Carsten Spohr , hoping for political help.
A company spokesman confirmed on Wednesday in Frankfurt that social security benefits had been applied for in various countries for the employees concerned. Depending on the company and part of the company , this applies retrospectively from March 1, but mostly from April. The portal had previously reported on Business Insider . The largest aviation group in Europe employed around 135,000 men and women in 2019.
All airlines and subsidiaries in Germany, Austria, Switzerland and Belgium are affected by short-time working . In addition to the already known around 27,000 short-time workers at the German core company Lufthansa, there are other large blocks at Swiss (9500) and Austrian (7000). The Belgian Brussels Airlines, Lufthansa Technik and the catering subsidiary LSG also have a lot of work to do. Lufthansa pilots have yet to reach an agreement with the Cockpit Association.
Economy in corona crisis: BMW measure hits 20,000 employees
Update of March 31, 7:33 p.m .: Adidas is responding to the corona crisis and the associated uncertainties by stopping the share buyback program for this year. How the sporting goods manufacturer wants to maintain its financial flexibility in the current environment. Immediately after the start of retail closings in Europe and North America , Adidas had on March 17 suspended the first tranche of its multi-year share buyback program. With the current decision of the board, the company will not use up to one billion euros, which were earmarked for the share buyback.
At the same time, the company announced that it had reached an agreement with the works councils at the German retail locations on April 1 to reduce working hours . Accordingly, this includes paid vacation, the reduction of overtime and short-time work . Around 1200 employees are currently affected by short-time work.
In Bavaria, Health Minister Huml comes under pressure - Söder demands more speed and sends his lawyers *.
Economy in corona crisis: BMW measure hits 20,000 employees
Update of March 31, 2020, 5:51 p.m .: In view of the closure of all branches in Germany due to the Corona crisis, the Swedish fashion chain H&M has applied for short-time benefits for almost 20,000 employees for the period from March to May. The company announced in Hamburg.
The company announced that it would increase short-time work benefits to 100 percent of its net salary in March and to 90 percent in April and May, following an agreement with the general works council. Solutions have also been found for mini-jobbers and working students .
Update of March 31, 2020, 5:30 p.m .: Federal Labor Minister Hubertus Heil (SPD) has rejected calls for increased government aid in the coronavirus pandemic. Germany is now "in implementation mode", said Heil in Berlin on Tuesday. "You should be careful with further financial commitments."
He said, however, that "I would examine all reasonable proposals and, in case of doubt, approach the legislature," added Heil. This applies if the restrictions due to the coronavirus pandemic apply longer than previously thought .
Auto industry shaken by corona crisis: VW extends stop
Update of March 31, 2020, 5:02 p.m .: The auto industry remains a major problem child in the Corona crisis: Volkswagen is extending the closure of its core brand plants in Germany by another ten days due to the Corona pandemic. Instead of until April 9, as planned, production will now be suspended until April 19, the company said on Tuesday. The interruptions had already been extended. VW has reported short-time work for tens of thousands of employees .
In the meantime, several large companies have already expressed their interest in government aid.
Corona virus and the German economy: Breweries in need, the state responds
Update of March 31, 2020, 4.47 p.m .: The state is helping the German breweries hit by the Corona crisis : According to the German Brewers Association (DBB), the federal government and the states agreed on a nationwide deferral of the beer tax on Tuesday. The industry is afraid of a bankruptcy wave due to closed restaurants and canceled events, which have a massive impact on beverage sales.
The temporary relief for the breweries is estimated at EUR 650 million. "This is an important signal for the brewing industry, even if I have to emphasize that it is a deferral of the tax, not subsidies or state aid," said Eichele.
Update of March 31, 2020, 3:22 p.m .: Germany's breweries are calling for financial support from the state in the Corona crisis to avert a bankruptcy wave. "We fear that a large number of restaurants and breweries will have to give up in the coming weeks," said Holger Eichele, chief executive of the German Brewers Association (DBB), on Tuesday to the AFP news agency. Many of the approximately 1,500 beer producers nationwide are threatened in their existence by the continued closure of restaurants and bars . There is also a risk of a bottleneck in the supply of empties to producers .
Many of the medium-sized breweries therefore generate a large part of their sales through regional gastronomy. In addition, according to Eichele, there are lease payments and loans from the restaurants, some of which are now completely canceled. In addition, tens of thousands of events were canceled and the export business largely came to a standstill.
"Many restaurants and breweries will not survive this crisis without government aid," said Eichele. The Wernecker brewery in Bavaria was the first family business to give up after 400 years.
Corona virus with long-term effects on the German economy - regional and digital?
Update from March 31, 2:28 p.m .: The management consultancy McKinsey expects major changes in the German economy after the Corona crisis - it can be expected that more will happen in the region and digitally. "Companies will be more secure," McKinsey production and supply chain expert Knut Alicke said in a video conference Tuesday.
In the automotive industry, for example, there are complex supply chains of up to six or seven levels; Sea freight between Europe and China was underway for a month. "We expect a lot of companies to look at their global supply chains and build more local structures," said Alicke. The trend to produce in the region for the region - in Eastern Europe for Europe, in China for China - will intensify. The wage differentials between China, Eastern Europe and Mexico are no longer that big. In addition, inventories are likely to increase.
At the same time, the digitalization of the entire economy will now take place much faster. “When things are going well and profitability is right, nobody wants to change. Now you are forced to think about new structures, ”said the consultant. Online retail is a big winner . "Many retailers are now offering their goods online for the first time." Supermarkets are currently benefiting from hamster purchases and panic purchases of toilet paper, but this is not going to last, because "the demand is not growing". The aviation industry, on the other hand, is likely to feel the slow recovery in tourism and the decline in business travel for longer.
Coronavirus affects German economy: Altmaier also expects slumps
Corona crisis hits German economy: 470,000 companies rely on short-time work
Update from March 31, 2:25 p.m .: According to the Federal Minister of Labor Hubertus Heil (SPD), 470,000 companies have so far received notice of short-time work in the corona crisis. How many people will be affected by short-time work cannot yet be precisely estimated, said Heil on Tuesday in Berlin. However, it should be expected that there will be more than during the financial crisis; at that time this affected 1.4 million people.
Corona crisis: BMW short-time work hits 20,000 employees - “petrol station deaths” also feared
Munich / Stuttgart - The corona crisis hits many branches of business life hard - from shopkeepers to creative artists and professional sports to gastronomy. But the auto industry is obviously suffering badly. At the end of March, several bad news and calls for help came from the industry, which is so important for Germany.
For example, BMW registered short-time work * for almost 20,000 employees with the employment agency in March. Most of them were employed in the Dingolfing, Munich, Regensburg and Leipzig plants, a spokeswoman said on Tuesday.
Corona crisis plunges car manufacturers into trouble: BMW and Porsche shut down production
The carmaker had stopped production in its European factories two weeks ago. The tapes should initially be up to April 19. Because of the corona crisis , the demand for cars has declined significantly, many dealers in Europe have closed, and many suppliers are also stopping work.
Almost 20,000 BMW employees on short-time work - the Dingolfing plant is also affected.
© dpa / Armin Weigel
Work also stops elsewhere. Due to the corona virus pandemic, the plants of the sports car manufacturer Porsche will remain completely closed for at least next week. Against the background of the current situation, production in the main plant in Stuttgart-Zuffenhausen and Leipzig will continue to be suspended, a spokesman said on Tuesday. There are still bottlenecks in global supply chains that do not allow orderly production. Porsche announced in mid-March that it would initially stop working in the plants for two weeks. The carmaker has also registered short-time work for its employees.
Corona virus and the economic consequences: “Gas station deaths” feared
According to their association, petrol station operators in Germany are also in a highly dramatic situation due to the coronavirus crisis. If people refuel less because of exit restrictions, this could quickly bring operators to the brink of existence, a spokesman for the petrol station interest group told the German press agency on Tuesday. A week or two are just barely manageable. "But a small petrol station operator can't swallow three, four weeks or even more."
According to the association, the operators are usually only tenants of the petrol stations. However, the owners are large oil companies such as Shell or Total . Due to the current situation, the association demands that the lease be set to zero. In addition, the state should help with an immediate operating grant. "Otherwise we will have a gas station die, and within the next few months," said the spokesman.
Corona virus: Federal government should help car dealerships - Car handovers are currently difficult
In view of the corona virus crisis, the car industry is also calling on politicians to help affected car dealers."Nationwide, the automotive trade is currently facing massive problems, " says an appeal published on Tuesday by the Association of the Automotive Industry, the Association of International Motor Vehicle Manufacturers and the Central Association of the German Motor Vehicle Industry. Accordingly, the federal, state and local authorities should act quickly in order to "avert bankruptcies and job losses in the motor vehicle trade".
Because registration agencies are only limited or not open at all, dealers cannot allow cars, the appeal says. In addition, vehicles already registered could not be handed over to buyers in every state due to different regulations. "One solution could be that vehicle deliveries take place without any close contact between seller and buyer." The associations demanded that transfers be made possible nationwide.
Corona virus: VW boss Diess still has hope for 2020
But there is obviously also a glimmer of hope. Volkswagen CEO Herbert Diess does not want to write off the financial year completely despite the Corona crisis. Whether the group will achieve its profit targets for 2020 can only really be estimated if the duration of the "shutdown" can be foreseen, Diess said in a podcast published on Tuesday with journalist Gabor Steingart.
"If you assume that the crisis will be dealt with as quickly as China, then you can certainly get away with a black eye," said Diess. "If you assume, of course, that we have a shutdown here for months, then it will be difficult." However, the People's Republic admitted a questionable trick on their statistics on Corona case numbers on Tuesday.
In the meantime, Bavaria's Prime Minister Markus Söder, together with Finance Minister Olaf Scholz, has explained the steps to contain the economic problems in the country.
Cell phone data monitoring is being debated in Germany - a virologist warns of "pseudo-security" and speaks of "hell-crazy".
dpa / fn
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Rubric list picture: © AFP / CHRISTOF STACHE