The Limited Times

Now you can see non-English news...

Top economist rejects demand for corona solos: "unnecessary and counterproductive"

2020-12-05T22:46:20.980Z


The corona pandemic is rapidly increasing national debt. The SPD is already calling for a corona solos. The former head of economic management, Prof. Christoph M. Schmidt, thinks this is wrong.


The corona pandemic is rapidly increasing national debt.

The SPD is already calling for a corona solos.

The former head of economic management, Prof. Christoph M. Schmidt, thinks this is wrong.

  • The federal government supports the

    companies particularly affected

    by the

    partial lockdown

    with billions.

  • But the bridging aid is expensive and the

    basis for calculation

    is controversial.

  • In

    future, state aid should be based on the

    previous year's

    profit

    instead of

    sales

    , demands RWI boss Schmidt.

Munich - The former head of economic management, Prof.

Christoph Schmidt

, has warned against the introduction of a corona soli.

The president of the renowned Leibniz Institute for Economic Research (

RWI

) told Merkur.de *

that additional burdens on the population are “counterproductive” and “unnecessary”

.

In doing so, Schmidt

countered the

demands of the

SPD-

ruled federal states.

The federal government should examine a “tax-financed stabilization of the contributions to the statutory health insurance, so that the additional costs do not have to be borne by the contributors only,” it was said in a draft resolution for the latest federal-state round at the end of November.

"Strong shoulders have to carry more than weak ones," said the SPD parliamentary group vice-chief

Bärbel Bas

.

This must also apply to the pandemic costs.

The statutory health insurance companies also welcomed the initiative.  

Corona aid ensures rapidly increasing new debt

For the coming year, Federal Finance Minister

Olaf Scholz

(

SPD

)

is planning

at least 160 billion euros in new debt.

The lion's share should go to the Corona * business aid (bridging aid I, II, II).

As recently as September, the draft budget included net borrowing of 96 billion euros.

The rapidly increasing new debt is causing criticism.

RWI President Schmidt also urges restraint.

If the state limits the expenditure for the corona pandemic to the absolutely necessary level, the higher debt level could be reduced in the coming years "without additional burdens for the citizens", said the long-time head of the

Advisory Council on the assessment of macroeconomic development

( SVR).

Schmidt also pointed out possible credibility problems if “a similar instrument for Corona aid would be reintroduced immediately after the partial abolition of the solidarity surcharge”.

Corona help: RWI boss calls for a new calculation basis

At the same time, the earlier economy called for a change of direction in the calculation of corporate aid.

According to the requirements extended at the end of November, the federal government is currently assuming 75 percent of the loss of revenue from companies that are particularly affected by the corona pandemic and the partial lockdown, such as hotels or restaurants.

However, the regulation is controversial.

"Companies with a high proportion of variable costs" would be better off with this help than "in a situation in which they have to generate their own profit from open deals," said Schmidt.

In contrast, the self-employed, who have hardly any variable costs, would be “considerably worse off”.

One possible option would therefore be "an orientation of the emergency aid to fixed costs and the surplus of the previous year", said the economist.

* Merkur.de is part of the nationwide Ippen Digital editorial network.

Source: merkur

All news articles on 2020-12-05

You may like

Trends 24h

News/Politics 2024-03-27T16:45:54.081Z
News/Politics 2024-03-28T06:04:53.137Z

Latest

© Communities 2019 - Privacy

The information on this site is from external sources that are not under our control.
The inclusion of any links does not necessarily imply a recommendation or endorse the views expressed within them.