The wording of the federal resolution paper

Resolution proposal from the Chancellery

Due to the high number of corona infections, the lockdown in Germany is expected to be extended until mid-February. 15 points are listed on nine pages.

Probably the most far-reaching new steps: At local and regional level, the measures are to be tightened again if the seven-day incidence has not fallen below 50 by February 15. In addition, the wearing of medical masks in local and long-distance public transport is to become mandatory.

Read the draft here in full:

Video switching conference between the Chancellor and the heads of government of the federal states on January 19, 2021

draft
Status: January 18, 2021 9:00 p.m.

The Federal Chancellor and the heads of government of the federal states adopt the following resolution:

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Hubertus Heil on the home office debate: “A very clear message”

Hubertus Heil

The Federal Minister of Labor says: “I am serious about proposals.”

(Photo: dpa)

Berlin Labor Minister Hubertus Heil (SPD) has urgently appealed to employers to allow home offices wherever possible. “This is not just any appeal, but a very clear message from the federal and state governments to the economy,” said the SPD politician in an interview with the Handelsblatt.

Many companies acted responsibly. But there are also those who arbitrarily refused to work on the move. “That is irresponsible,” said Heil.

The request to work from home if possible is also directed at the employees – even if he understands that many would like to see their colleagues again. But it is a question of responsibility, and the employees are also deceived.

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Hartz IV changes: These are the plans of the parties

Hartz IV could soon change fundamentally and become more generous. The system, also called basic security or unemployment benefit II, serves as a safety net to secure a livelihood.

It has been controversial since it was introduced in 2005 by the then red-green federal government. With a view to the federal elections in September, the parties have first major change plans. And already now, Federal Labor Minister Hubertus Heil (SPD) wants to enforce a new bill that will defuse the system. An overview.

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Axel Bünger was repeatedly without a job for longer.  Now the 52-year-old works for a housing association.  He collects garbage, swaps lightbulbs, speaks to tenants - for 2100 euros gross

Basic Income Experiment

SPD Minister Heil wants to maintain corona rules

In the wake of the pandemic, access to Hartz IV was simplified, among other things, to help the many self-employed solo workers who are struggling with declining income. According to the will of the Minister of Labor, core elements of this regulation are to be retained permanently.

The corresponding draft law provides that in the first two years of the Hartz IV subscription, so-called “insignificant” assets and rental costs are not checked for appropriateness. Savings of up to 60,000 euros (plus 30,000 euros for each additional household member) would therefore initially not have to be touched.

Source: WORLD infographic

“Anyone who is temporarily looking for work and is covered by the basic security must be able to rely on it and have the security of not having to worry about their savings and housing for the time being,” explains the ministry in a fact sheet. In “Spiegel” Heil had said: “The basic security should become a social citizen’s benefit, for which nobody has to be ashamed who needs it.”

In addition, the sanctions for the long-term unemployed are now to be permanently limited by law. Since a ruling by the Federal Constitutional Court in November 2019, Hartz IV recipients who miss appointments or refuse jobs may only be sanctioned to a limited extent.

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Employment agency announces figures

The standard rate can only be reduced by up to 30 percent. So far, this has only been regulated by instructions from the Ministry and the Federal Employment Agency (BA). According to Heils plans, under no circumstances should anyone have to fear that the housing costs will be affected by reduced benefits. Stricter rules for under-25-year-olds should be dropped entirely. Those who do further training should receive a bonus of 75 euros per month.

At their party congress at the end of 2019, the Social Democrats had already decided on the demand to overcome Hartz IV. The SPD proposals for this went far beyond the reform that was now planned. In the draft law, additional expenditure by the federal government, municipalities and the BA is estimated at around 550 million euros.

Union and FDP: No creeping introduction of a basic income

Heil’s move met with rejection from the coalition partner. The Union is ready to talk to extend the special corona regulations if necessary, said the CDU social expert Peter Weiß. It is currently planned to expire at the end of March.

“But we still stand by the principle of ‘support and demand’ and also reject the expiry of these special regulations,” he said. “A creeping introduction of an unconditional basic income is not possible with us.” Because this would devalue work and the placement in work would be less attractive.

Source: WORLD infographic

A lump sum payment for all citizens is not provided for in the salvation draft. However, critics see the reform proposals as steps in this direction. Pascal Kober, social policy spokesman for the FDP parliamentary group, also described the waiver of sanctions and the increase in benefits as “introducing the unconditional basic income through the back door”.

There is also criticism about the burden on taxpayers. Holger Schäfer from the employer-related Institute of the German Economy (IW) is particularly critical of the suspension of the housing cost review. This is justifiable in the pandemic, but otherwise not.

“If in doubt, the taxpayer would otherwise have to finance very expensive rents,” said the labor economist. “It would hardly be possible to convey to him if the recipient of a welfare benefit resides in a four-room apartment, but he can only afford two rooms himself.”

also read

From a secure job to resigning: This year turned out differently than expected for many employees

Changes go into the money for taxpayers: For the year 2021 alone, the federal government is earmarking 23.4 billion euros for unemployment benefit II. Together with the costs for heating and rent, integration measures in the labor market and administrative expenses, around 45 billion euros are planned.

However, the CDU said earlier that it did not want the receipt of state benefits to mean that owner-occupied residential property had to be given up. The legal regulations on asset utilization and on protective assets will be “revised, adjusted and changed so that recipients of state social benefits can continue to live in their own home”.

Greens and Left: Overcome Hartz IV completely

However, Heil’s advance does not go far enough, left leader Katja Kipping. She is committed to replacing Hartz IV with a “minimum income guarantee above the poverty line” without any sanctions.

The Greens, in turn, have just presented details of their own Hartz IV alternative, with which they are going into the federal election campaign: the “guarantee”. There should no longer be any sanctions and the standard rate should be gradually increased to 600 euros per month. At 446 euros, it is currently significantly lower for single people without children.

Source: WORLD infographic

The asset check is to be omitted, the information provided by those affected will only be checked in justified cases. The partner’s income should no longer be taken into account. The deputy group leader Anja Hajduk put the annual cost of the reform at a low double-digit billion amount.

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November 20, 2020, Berlin: Annalena Baerbock, federal chairwoman of Bündnis 90 / Die Grünen, stands gesticulating on the podium at the beginning of the three-day, digital federal party conference of the Greens.  In the year of its 40th anniversary, the Greens want to adopt a new basic program.  The party congress takes place as a large video conference.  Only the board and the presidium are in the broadcasting center, in the Tempodrom.  Photo: Kay Nietfeld / dpa |  Usage worldwide

Controversial party conference decision

In perspective, however, the Greens want even more. At the party congress in November, the delegates voted against the will of the board of directors to “orient themselves towards the guiding principle of an unconditional basic income” according to the basic program.

AfD: Special rules for foreigners

At the AfD, Heil’s initiative met with rejection. It is a “worsening improvement of the Hartz IV system,” said René Springer, labor market policy spokesman for the AfD parliamentary group. It leads to more recipients and a higher burden on taxpayers.

“In order to avoid false incentives to immigrate into the social security system, the principle of ‘benefits in kind before cash benefits’ must apply to asylum seekers,” said Springer. He also wants to further develop Hartz IV so that additional earnings are more worthwhile.

Source: WORLD infographic

The FDP has specific criticism of the previous limits on additional earnings. Social policy expert Kober explains: Hartz IV recipients could keep the first 100 euros, but those who have an income of over 100 and up to 1000 euros would have to give 80 percent of each euro. With a mini-job that pays 450 euros per month, that leaves only 170 euros in the end.

“It can’t stay that way,” says Kober. In the long term, he would like to summarize Hartz IV with child allowance and housing benefit. The CDU is also striving for a reform of income accounting. “We are calling for a reform of the imputation rules in order to encourage step-by-step withdrawals from drawing benefits,” the party said.

Experts: System change unlikely

Experts do not consider a radical system change, for example towards an unconditional basic income (UBI), to be likely in the short term. Overall, Hartz IV is an “effective form of basic security,” says IW economist Schäfer.

One cannot deny that the labor market situation has improved significantly since its introduction – “even if it is difficult to prove a causal connection here,” says Schäfer.

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An employee of the Maschinenbau und Service GmbH (MSG) in Ammendorf cuts corroded metal parts from the carrier in a car body of the series 481 of the S-Bahn Berlin with a cut-off machine.  In 2020 alone, Deutsche Bahn will renovate around 90 vehicles of this series to make them fit for another ten years.  Probably every 20th of the total of 500 double wagons shows severe corrosion damage.  These are extensively repaired at MSG in Halle-Ammendorf, where the cars were built between 1997-2004.  For this, parts of the solebar must be removed and reinserted.  In the Berlin S-Bahnwerk, all vehicles of this series are being refurbished and also given a facelift.

From the point of view of Jürgen Schupp from the German Institute for Economic Research (DIW), a system change could have some advantages. For example, a basic income could alleviate existential fears. However, numerous questions would have to be clarified, such as the amount and funding.

DIW itself has started a long-term BGE study with the Mein Grundeinkommen association. Schupp has one wish for the next legislative period: that a study commission of the German Bundestag “Welfare State 2030” be set up. According to him, this should take stock – both with a view to the future viability of the contribution-financed system and possible alternatives such as a UBI.

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Government resolves quota for board members

Women’s quota for company boards is coming

Federal Minister of Justice Christine Lambrecht (left) and Federal Minister for Women Franziska Giffey (both SPD) announce the resolution on the new executive positions law after the meeting of the Federal Cabinet.

(Photo: dpa)

Berlin After years of debate, it is now clear: The requirements for the participation of women in management positions will be tightened. That was decided by the cabinet on Wednesday. The reform includes a new quota for women on board members and an obligation to justify and report on the flexible quota for women, for which companies must set targets for more women in management positions.

“We are ensuring that there will no longer be any women-free boardrooms in the large German companies concerned,” said Federal Family Minister Franziska Giffey after the cabinet decision. “We have seen over the years: very little is done voluntarily and it goes very slowly.”

Federal Minister of Justice Christine Lambrecht (both SPD) emphasized that guidelines would “have a positive impact and role model function in the respective company, but also generally on the promotion of young women”.

Finance Minister and SPD Chancellor candidate Olaf Scholz said: “The quota is coming, women-free company boards are disappearing.” The time for voluntary measures is finally over. The deputy chairman of the CDU / CSU parliamentary group, Nadine Schön, spoke of a “milestone”: on a “voluntary basis”, the proportion of women in management positions in companies has not increased.

Some kind of guerrilla action

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Corona and labor market: Partial lockdown hardly costs jobs – economy

The measures against rising corona infections are initially hardly causing layoffs in Germany. After politicians had closed restaurants, sports and cultural venues in November, unemployment had nevertheless fallen that month. In December it only increased by 8,000 to 2.71 million people. However, unemployment always rises in winter because construction sites are idle. If you take this seasonal effect out of the equation, there were almost 40,000 fewer job seekers in December in November.

Why are the closings hardly costing any jobs at first? One reason for this is that companies registered short-time work for almost 700,000 employees in December in order to avoid layoffs. “The advertisements for short-time work have increased again, but only to a limited extent,” says Detlef Scheele, chief executive of the Federal Employment Agency.

The renewed partial lockdown has so far not had a serious impact on the labor market. With this positive balance, however, one must take into account that the figures from the Federal Agency only ever record the development up to the middle of the month. It is therefore still unclear what effect the tightening of the lockdown before Christmas, which also affects business and is to be extended until the end of January. The hope is that short-time work and other state aid will prevent layoffs again. This was already achieved in 2020 as a whole, when massive government measures prevented a major disaster on the labor market caused by the pandemic. It is true that the number of job seekers rose by a good 400,000 to almost 2.7 million on an annual average. In other industrialized countries, however, the corona crisis has cost far more jobs.

How things will go on in the German labor market now depends on economic developments. Most economic researchers assume that the German economy will grow by three to five percent again this year after the corona shock. However, Bert Rürup, a long-time business practitioner, believes that the gross domestic product will still shrink in the first three months of 2021. Germany would then be in recession again. “As long as the pandemic has not really been overcome, the recovery will not be straightforward,” said Rürup.

In addition, the partial lockdown is likely to shape large parts of the economy and society, at least until Easter. “Unemployment will rise by more than 100,000 this year,” says Rürup. Because of the federal elections in 2021, politicians will try a lot to slow down or hide the increase. After these measures have expired, unemployment will initially continue to rise this year despite the upswing and will then be just under three million on average for the year. “The crisis would then have made a total of 700,000 people permanently unemployed.”

Less business trips, less shopping in the city center

Timo Wollmershäuser is more optimistic. “The industry has not shown any signs of weakness since autumn,” says the economic chief of the Munich Ifo Institute. “You could almost say it is buzzing there. In addition, the vaccine is now available. I think the German economy will recover quickly.” It is true that an extended closure of shops will put pressure on the economy. Wollmershäuser expects the German economy to grow slightly in the first quarter. For the second quarter he then sees a strong plus of almost three percent.

As for the labor market, short-time work has prevented many layoffs. “Companies that have actually laid off are probably not hiring at first,” said Wollmershäuser. The economist sees a fundamental structural change as a result of the pandemic: fewer business trips, less shopping in the city center. That costs jobs in hotels, airlines and department stores. Unemployment is stagnating this year at 2.7 million and will only decrease to 2.5 million in 2022. That would still be 250,000 more than before the outbreak of the pandemic.

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Job boom: The end of the golden era on the job market

JFor decades the German labor market acted like the “superman” of the labor markets. Around the globe, and not least in Europe, many nations have repeatedly struggled with a decline in employment and high unemployment figures. But nothing seemed to throw the Germans off course. Year after year hundreds of thousands of new jobs were created in the Federal Republic of Germany, which provided people with income.

But now, it seems, the German super job market has had its encounter with kryptonite, the only substance that can harm the superhero.

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Job boom: The end of the golden era on the job market

JFor decades the German labor market looked like the “superman” of the labor markets. Around the globe, and not least in Europe, many nations have repeatedly struggled with a decline in employment and high unemployment figures. But nothing seemed to throw the Germans off course. Year after year, hundreds of thousands of new jobs were created in the Federal Republic of Germany, which provided people with an income.

But now, it seems, the German super job market has had its encounter with kryptonite, the only substance that can harm the superhero.

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Strategists expect stronger price fluctuations

Stock exchange prices in Frankfurt

It will be a few months before the economy provides a lasting boost to the markets.

(Photo: dpa)

Frankfurt The new stock market year could begin as the old one ended: between hope and fear. The euphoria about the increasingly available vaccine against the coronavirus and the expectation of further support from central banks and states mean that the strategists are generally positive about the markets.

Above all, the mass vaccinations against the virus that have started in various countries give hope. But a sustained rise in share prices above the current high level seems a long way off. Because the economy will take longer before it recovers – there should therefore only be a real foundation for further price increases in summer. The strong fluctuations seen so far are likely to continue to be part of everyday stock market life.

Christopher Lees, fund manager at the British fund company Jo Hambro Capital Management, is “75 percent bullish” for stocks. His argument: The world economy is changing positively, from a depression to a recession. However, no one knows “whether a sustainable recovery is in sight”, he says, which explains the 25 percent probability of falling share prices.

Karen Ward, chief market strategist for Europe at US fund provider JP Morgan Asset Management, expects economic activity in the industrialized countries to remain subdued in the first quarter of the year and possibly also in the second quarter. After that, however, “we could see a marked increase in activity as the vaccination campaigns go on, the pent-up demand unleashed, and life slowly returning to normal,” she says.

The big question now seems to be when investors are actually betting on it. Now that not only the US stock indices, but also the German DAX have reached a new all-time high, the currently foreseeable positive market influences seem to have been largely priced in, says Carsten Mumm, chief investment strategist at Bank Donner & Reuschel: “However, this increases the risk of one thing Year starts with larger fluctuations. “

Corona profiteers also gain on the stock exchanges

In the shortened last trading week of 2020 until December 30th. put the Dax one percent. The German leading index climbed temporarily to a record high of 13,903 points – and closed the eventful year 2020 with a slight increase of 3.5 percent to 13,718 points. The index made up ground in December, which, in view of increasing confidence, posted its largest increase in December at a good three percent in four years.

By far the best DAX value was a crisis winner: the food supplier Delivery Hero benefited with a plus of 80 percent from the fact that many people had food brought to them from restaurants. This was followed by the semiconductor manufacturer and tech company Infineon with a good 50 percent plus and the pharmaceutical company Merck, one of the classic quality values, with a price increase of a third.

In contrast, Bayer, another Dax classic, came in last with a minus of one third: the pharmaceutical giant is still in a crisis of confidence in the legal dispute with investors over the controversial purchase of the US agricultural company Monsanto and its expiring pharmaceutical pipeline.

German second-tier stocks rose faster than the Dax in 2020: the MDax for medium-sized German stocks a good six percent, the TecDax even 18 percent. In the whole of Europe, however, share prices have not yet recovered as strongly: The leading euro zone index EuroStoxx50 lost 4.5 percent, the European Stoxx 50 even a good eight percent.

The US stock exchanges ended the crisis year 2020 with records: The Dow Jones and S&P 500 indexes closed on Thursday at highs of 30,606 points and 3756 points. The Dow rose by a good seven percent, the broader S&P 500 even a good 16 percent. The Nasdaq tech index posted its largest increase since 2009 with 43.6 percent.

Omnipresent pandemic and Brexit aftermath

However, the pandemic remains omnipresent: Shortly before the close of trading on the US stock exchanges on New Year’s Eve, the CDC announced a new record for the number of deaths in the US. Investors are also concerned with the second long-running issue, Brexit, even if the UK and the EU agreed on a free trade agreement shortly before Christmas.

However, the treaty will only come into force temporarily because there was not enough time for ratification by the EU Parliament by the end of the transition period on December 31, 2020. In addition, lengthy negotiations on detailed questions of economic relations must be expected in the coming years.

The bottom line, however, is that the strategists see no alternative to stocks, also because the second classic asset class, bonds, hardly brings any returns because of the persistently record-low interest rates. Ward of JP Morgan AM recommends overweighting stocks and currently sees “outperformance” in Asia given the better growth opportunities there. For bonds, “opportunities were limited to investment grade bonds and selected high-quality high-yield and emerging market bonds,” says the strategist.

Economic data, OPEC conference and decision on the US Senate

Little economic data will be published in the first week of the year that investors should be concerned about. The mood barometers for German and European purchasing managers should be of interest. The Commerzbank economists expect the industry to remain optimistic. This trend should be supported by the figures for German industrial production on Friday.

For the USA the Commerzbanker expect in the labor market report next Friday for December with 200,000 new jobs, thus “only slightly less than in November.” The data from the private employment agency ADP two days earlier provide a foretaste of these figures. Because of the increasing number of infections, the US economic engine is stuttering, say the Commerzbank analysts. But a recession is not to be feared.

At the Opec meeting on Monday, strategists expect the crude oil exporting countries to decide to expand production by 500,000 barrels a day.

The next day the world will look to the USA: The voters in Georgia will decide on the majority in the US Senate and thus on the possibility for future US President Joe Biden to achieve his political goals. Should both senatorial posts go to the Democrats in the by-election, there would be a stalemate in which the future Vice President Kamala Harris would have the decisive vote. Biden’s Democrats have a majority in the US House of Representatives.

With agency material.

More: Where analysts see the opportunities with stocks for 2021

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Short-time work does not result in unemployment after Corona

ALabor market policy Corona miracle weapon with downsides: Short-time working has proven itself to cushion the consequences of the Corona crisis, although there are some critical developments and they cost a lot. That is the opinion of the Federal Employment Agency. “We see that short-time work is leading to employment again, not unemployment,” said the chairman of the board, Detlef Scheele, in an interview with the German press agency. “Short-time working is falling, as is unemployment.” This shows that the instrument is suitable as a bridge over a crisis situation.

In Germany, more people were on short-time work than ever before, mainly because of the outbreak of the corona pandemic. The previous high was reached in April, with almost six million people. Since then, the number has gradually decreased to 2.22 million in September. On average, 36 percent of the working hours of those affected fell out in September. At the previous high in April, it was an average failure of 48 percent.

In total, the Federal Agency will have spent more than 20 billion euros on short-time work by the end of the year. In 2019 it was 157 million euros; the budget for this year originally included 255 million euros. An increase in short-time working is expected again in November and December, after a partial lockdown in the catering sector, among other things, and since mid-December the retail sector has also largely been closed again. In November alone there were 537,000 new advertisements for short-time work – but not all of them are usually implemented.

Critics see “zombie” businesses emerging

Critics, including experts from the Boston Consulting Group, had complained that the large-scale short-time working in Germany meant that the necessary transformation processes in the industry did not take place or took place too late. Among other things, there was talk of “zombie” companies that would only be kept afloat by the state assuming wages via short-time work.

“We don’t see a structural problem,” said Scheele. Nevertheless, there could be “occasional deadweight effects”. This cannot be completely ruled out with the funds of the Federal Agency. When weighing up the interests of the loss of jobs and few deadweight effects, he was in favor of minimizing the loss of jobs. “If we didn’t have short-time work, the country would look different,” said Scheele.

In industry in particular, it is extremely difficult to bring back jobs that have been lost. He called on the trade unions, chambers of commerce and employers’ associations to do more to encourage companies to make greater use of the opportunities to promote in-company qualifications – including during short-time work. The shortage of skilled workers will replace the corona crisis as the dominant topic on the labor market. Qualification is crucial for the transformation in the economy.

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Friedrich Merz: “One million immigrants in Hartz IV” – is he right?

FThe former Union parliamentary group leader Friedrich Merz is responsible for the controversy department of the three candidates for the CDU party chairmanship. So it was no surprise that in reporting on an election campaign event in which Merz, NRW Prime Minister Armin Laschet and ex-Environment Minister Norbert Röttgen answered questions from the party base, a statement by Merz was most strongly taken up:

“If we hadn’t had immigration to the social security systems in 2015/2016, we would have one million less Hartz IV recipients. That is part of the full picture of the debate. Unfortunately, it is often enough suppressed, “said Merz on Monday evening, when the differences in prosperity in Germany were discussed.

The order of a million sounds enormous – is it right?

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