The federal government is doing a lot wrong with billions in aid

Tuifly machines in Hanover

The management is partly to blame for the deep fall.

(Photo: dpa)

In retrospect, in one or two years, anyone who creates a list of the worst mistakes that the government made during the corona pandemic will put the name of a travel company listed in London at the top: Tui.

It has been known since Wednesday evening that the state has so far held a total of 4.3 billion euros in German taxpayers’ money to save the Hanover-based company – a company that is mostly owned by foreign investors.

The sum alone makes you speechless. For those who find it too abstract in view of the many zeros, relations like these could help: The travel company employs around 10,000 people in Germany, so that a rescue sum of 430,000 euros is allotted to each head. Would you like another comparison number? Since 2008, the federal government has invested almost exactly the same amount in a total of four daycare programs to create childcare places for half a million children under three years of age.

Tui managers are likely to object that part of the 4.3 billion euros was given by the state “only” as a guarantee. But Finance Minister Olaf Scholz has already secretly noted this on his depreciation list. Because: 2.8 billion euros, as calculated from Tui’s most recent ad hoc announcement, the travel company burned between August 12 and December 2 – more than 700 million euros per month.

The fact that Tui has 2.5 billion euros in liquidity after the third capital injection that has now been agreed, as CEO Fritz Joussen announced on Wednesday, will save the group for a further four months at the most.

Federal government can no longer get rid of the evil spirits

The federal government maneuvered itself into the mess like Goethe’s sorcerer’s apprentice. Because in order to get the damage under control, Berlin caused even greater calamities with thoughtless countermeasures – true to the poet’s word: “Those I called, the spirits, I can’t get rid of.”

Remember: Right at the beginning of the first lockdown in March, Berlin loosened a KfW loan of 1.8 billion euros for Tui in order to cover up its own failures. Because the federal government did not draw any conclusions six months earlier from the bankruptcy of the competitor Thomas Cook, the state would have had to be liable for a lack of customer money protection even in the event of a TUI bankruptcy – with an estimated half a billion euros.

The dilemma arose again in August 2020. If the state aid were not added, it was feared that 1.8 billion euros in tax money would have been irretrievably burned within just five months. An image GAU for the GroKo, which added another 1.2 billion euros in defense.

And now another 1.3 billion euros? And what will happen at the end of March if it is not enough again?

The federal government is plundering the state treasury for a company that is by no means as systemically relevant as Commerzbank, Lufthansa or Deutsche Bahn with a barely concealed salami tactic. And even worse: Thanks to the financing modalities, the state could soon become a powerful co-owner of the Hanover travel company through its Economic Stabilization Fund (WSF).

Taxpayers like Alltours owner Willi Verhuven or Schauinsland owner Gerald Kassner should thank them. Like so many others in the industry, they have so far – apart from the short-time working allowance – received no state aid. In return, however, the state is now even competing with them with Tui.

State economy: aid funds and distortion of competition

Other tourism firms in need of help in the pandemic only got it in homeopathic doses. A few days ago, for example, the state let the travel agency chain Bühler with 32 branches and 220 employees slide into bankruptcy, although the case was known in Berlin. With monthly fixed costs of half a million euros, the government donated just 50,000 euros a month.

Which is true: The corona pandemic came over Tui like a natural disaster. But the management is partly to blame for the deep fall. When he took office in 2013, CEO Fritz Joussen made a conscious decision to prescribe a “heavy asset strategy” for Tui.

Instead of just trading in hotel, ship and flight contingents like most competitors, as many ships, hotels and aircraft as possible should be found. At every stage of production, the income should flow into the company’s coffers.

But where there are high earnings opportunities, as business economists learn in the first semester, risk often lurks. A buffer for bad times would have helped the company more, but Tui opted for lavish dividend payments to its shareholders instead. That even in mid-February 2020.

More: Third billion aid package for Tui – State could become a major shareholder.

.

How Germany should fight the bankruptcy wave

In Schramberg near Rottweil, the Bühler travel agency group filed for insolvency. Travel warnings, insecure vacationers and the discontinuation of business trips resulted in a drop in sales of more than 90 percent.

Previously, Parfois, the second specialist shop for women’s clothing, closed in the Dortmund shopping center after Hallhuber. At first the lockdown, including the forced closure, caused sales to drop to zero, then customers came back hesitantly. Shopping with mouth and nose covering is simply no fun.

These examples further extend the list of corona victims. It includes insolvencies or protective shield proceedings from well-known companies such as Escada, Esprit, Hallhuber, Vapiano, Maredo and Galeria Karstadt Kaufhof.

A grace period runs until the end of the year: Until then, the obligation to file for insolvency is suspended for corona-related, over-indebted companies. But Federal Justice Minister Christine Lambrecht (SPD) does not want to extend this measure against the impending bankruptcy wave again, the ministry said on request. There should be a “seamless transition” between the expiry of the regulation for the suspension of the obligation to file for insolvency and the entry into force of a new restructuring and insolvency law.

Companies would not have to file for bankruptcy, but could carry out a restructuring outside of judicial proceedings. This seems a bright spot for corona-related imbalances. But can this really prevent a wave of bankruptcies in Germany?

“I’m skeptical,” says Lucas Flöther, who has made a name for himself as the insolvency administrator of Air Berlin and is also the spokesman for the Gravenbrucher district, which brings together Germany’s leading insolvency administrators and restructuring experts. “It will be a very complex process that is only possible for large companies,” says Flöther. “But that’s hardly useful for small and medium-sized companies.”

The situation is dicey. “We are already anticipating a noticeable increase in bankruptcies in the first quarter of the new year,” says Stephan Lang, partner at the international personnel consultancy Indigo Headhunters. He refers to the complete return to the classic filing for bankruptcy.

So far, the number of bankruptcies nationwide has not increased that dramatically. In 2019 and the first half of 2020, restructuring and insolvency experts like Euler Hermes and Creditreform registered fewer bankruptcies than ever before. According to the credit reporting agency Creditreform, the number of corporate insolvencies fell again by 8.2 percent to 8900 cases in the first half of 2020 compared to the same period in the previous year.

That was so little for more than ten years. First the long-lasting economic upswing was the cause, then the obligation to file for bankruptcy, which was suspended as a result of the corona crisis. This has already expired for insolvent companies since October 1, which affects more than 90 percent of all bankruptcies. Nevertheless, the credit reporting agency Creditreform has not yet registered any significant increase in the number of insolvencies.

The experts blame two reasons for this: The federal government’s many aid programs, which will apply well into the coming year, have kept many self-employed, small and micro-businesses alive, despite the enormous loss of income. Many companies ignored the financial difficulties in view of the aid money.

In addition, it takes an average of 60 days before an application for bankruptcy, which has not been postponed since October, is actually included in the statistics. First of all, the local courts have to examine the application process, then initiate and assess it before a bankruptcy decision is made.

Companies and states face greater payment difficulties

But postponed is not canceled. It is clear that even a few very large bankruptcies can quickly change this picture in the future, said Steffen Müller from the Leibniz Institute for Economic Research Halle (IWH). According to Bundesbank Vice President Claudia Buch, companies and countries have to prepare for major payment difficulties.

The credit insurer Euler Hermes expects a noticeable increase in insolvencies next year. For 2021, Euler Hermes is forecasting an increase of eight percent compared to 2019. The danger of a domino effect is causing concern, as the number of highly indebted companies is likely to rise sharply due to the temporary suspension of the obligation to file for insolvency and the state aid programs.

According to a current survey by the Ifo Institute, around 15 percent of German companies currently feel their existence is threatened by the corona crisis. The mood is particularly gloomy in some industries: 86 percent of travel agencies and tour operators see themselves threatened, 76 percent of hotels and 62 percent of restaurants. Even among metal producers and processors, the livelihood worries are above average at 34 percent.

In fact, experts expect that the pandemic will lead to further bankruptcies, especially in tourism, gastronomy, automotive suppliers and retail.

The state aid, which has been extended well into the coming year, is still helping SMEs to conserve their equity. Creditreform’s insolvency experts questioned more than 1,000 medium-sized companies. A good third (36 percent) complain about lost sales and almost 40 percent lower profits. For the first time since 2014, the number of companies willing to invest fell below the 50 percent mark.

How difficult the situation really is is currently being masked by a great deal of government aid. A third of medium-sized companies are currently taking advantage of short-time working, and almost every third company applied for state emergency aid to bridge a corona-related liquidity bottleneck. Depending on the size of the company, this can cost up to 50,000 euros.

A KfW quick loan of up to EUR 800,000 or a loan from the KfW special program of a maximum of EUR 100 million have taken advantage of twelve percent of SMEs.

The litmus test is still pending and will be postponed as long as the federal government helps ailing companies with state money.

Justice Minister Lambrecht’s new restructuring law also aims to avoid insolvency. The whole thing is not an idea that was born from the hardships of the corona pandemic. The EU directive on “preventive restructuring frameworks” came into force in July 2019 and must now be implemented in national law. But in times of crisis the new restructuring instruments seem to come in handy.

And the StaRUG has it all: In 108 paragraphs it is stated that a restructuring plan can be decided in the future if creditors or groups of creditors agree with a qualified majority of 75 percent of the voting rights. “Pieceworkers” who block votes and thus torpedo redevelopment plans would be a thing of the past.

From a taxpayer’s point of view, the new instrument is “very questionable”

The gap between the free reorganization of companies, for which a consensus of all parties is required, and the strictly regulated reorganization in insolvency proceedings would be closed.

From the taxpayer’s point of view, however, the insolvency administrator Flöther considers it “very worrying” that the state is on the one hand a donor of aid funds and at the same time provides an instrument with which companies can very easily dispose of their debts.

“Companies that try to cope with the corona crisis without state support must not be massively disadvantaged compared to those companies that take state aid and then get rid of these liabilities on the basis of the new law in the short term without the consequences of insolvency.”

The termination of the contract provided for in the law is also controversial: The company with a restructuring plan can apply to the court for ongoing contracts to be terminated if the contractual partner does not comply with “an adjustment or termination request by the debtor”. Such serious interventions – such as terminating tenancies – were previously only provided for under bankruptcy law.

It was above all this point that was recently viewed particularly critically by the experts at the hearing in the Bundestag. According to Mechthild Greve from the Federal Bar Association (BRAK), such a contract cancellation would be seen as an interference with the property rights of the creditors. She warned of a domino effect for affected contracting parties.

Your scenario: Due to the termination of a contract, a plant manufacturer could scrap the production plant tailored to the needs of the customer shortly before its acceptance and delivery. He must correct his evaluation of the half-finished orders in the balance sheet and thus disclose it. This could trigger the threat of insolvency for himself.

The experts also criticized the fact that the new restructuring law does not seem a perfect fit for small and medium-sized enterprises (SMEs). Not only the German Association of Insolvency Administrators (VID) called for a Covid protective shield procedure for SMEs.

The reporter of the SPD parliamentary group responsible for the draft law, Karl-Heinz Brunner, also sees a “loophole” here. He demanded: “We have to adapt the protective shield procedure in insolvency law so that it is open to SMEs in the pandemic.” That is more suitable than the new restructuring law.

Justice Minister Lambrecht does not see this need. Upon request, the ministry announced that the planned instruments were equally suitable for all companies, “including medium-sized and small companies”.

More: Justice Minister Lambrecht is targeting uncooperative landlords in the corona crisis

.

Which manufacturers benefit from the coronavirus

Frankfurt Few industries have benefited commercially from the corona pandemic as significantly as the manufacturers of laboratory diagnostics. The strong demand for tests to detect Sars-CoV-2 infections gave them an unexpected upturn from March. For the first time in a long time, sales of diagnostics will increase by double digits this year and thus grow significantly faster than the pharmaceutical market.

But industry experts fear that the current upswing could turn out to be a fragile boom. The soaring could come to an abrupt end if the pandemic were to be contained in the coming year with successful vaccines.

Managers from the industry are also trying to dampen the euphoria. Alexandre Mérieux, the head of the French diagnostics manufacturer Biomerieux, referred to “recent developments in the pandemic area that are causing us to be cautious in terms of performance outlook” when the latest quarterly report was presented, despite the strong figures. The current development cannot be projected beyond 2020.

The present is bright, however: 2020 will be an enormously strong year for the diagnostics industry, which has sales of around 60 billion dollars. And at least for the first half of 2021, it looks very good.

In the past third quarter of 2020, the top ten diagnostics providers recorded an average sales growth of around 17 percent. In the first nine months of the year it was around 13 percent. In particular, the strong demand for so-called PCR tests, in which detailed blood tests are carried out in the laboratory, for Covid diagnostics initially drove business.

In the meantime, the faster antigen tests have been added, in which the results are available in a few minutes after swabs. Especially those players who are strongly represented in these product segments are currently growing at an above-average rate.

The American diagnostics companies Hologic and Quidel climbed particularly steeply, doubling their sales in the first nine months. However, companies such as Thermo Fisher, Biomerieux and the German biotech and diagnostics group Qiagen, which is active both with its own PCR and antigen tests and as a supplier, also posted significantly above-average growth.

In the case of Qiagen, the sudden corona boom even brought down the planned takeover of the Hilden-based group by the US competitor Thermo Fisher. In view of the greatly improved prospects, too many investors rejected the American offer. Thanks to Corona, Qiagen was able to remain independent.

For the full year, the company is now forecasting revenue growth of 20 percent and an increase in adjusted earnings per share to $ 2.07 to $ 2.09. This corresponds to an increase of around 45 percent compared to the previous year.

graphic

The prognoses at Thermo Fisher look similar. The US company Hologic, which closed its 2020 financial year at the end of September, is forecasting organic growth of up to 80 percent for the first quarter of the next financial year.

The loser among the large diagnostics providers, however, is the Siemens offshoot Healthineers, which posted a sales slump of 16 percent in the diagnostics business in the third quarter and five percent less in dollar terms in the first nine months. Siemens Healthineers is very small in the field of molecular diagnostics, which includes PCR tests. According to the company, higher sales thanks to Covid-19 tests could therefore not compensate for the losses in tests for routine examinations.

Healthineers is thus showing particularly clearly how divided the development in the diagnostics business is. Other manufacturers such as Roche, Abbott or Biomerieux also posted losses in their traditional business with routine diagnostics because many tests were postponed. The other companies were mostly able to compensate for this effect with extensive deliveries of Covid tests.

New rapid tests are in demand

The diagnostics business is currently receiving a further boost from so-called antigen tests. They enable an acute Sars-CoV-2 infection to be detected relatively quickly, but are less sensitive than the PCR tests, in which the genetic material of the virus must first be duplicated.

The demand for the new rapid tests has been great, especially since the Federal Ministry of Health recommended the use of antigen tests for broad testing in medical facilities in mid-October. With the new test strategy, the Federal Ministry of Health wants to prevent old and sick people from getting infected. For them, the risk of serious consequences of infection is greatest, as the ministry said.

But the tests are not only used by residents and staff in old people’s homes; medical practices and many companies also want to test their employees. In any case, sales of rapid tests in German pharmacies have skyrocketed, as data from the market research institute Insight Health show. While only 800 and 900 rapid tests were sold through German pharmacies in the holiday months of July and August, the number rose significantly in October with the new test strategy: to more than 26,000 tests.

Initially only a handful of antigen tests were available in Germany, but now there are well over a hundred. The number of providers is increasing rapidly and with it the competition in the industry. The Federal Institute for Drugs and Medical Devices currently lists more than 200 antigen tests for direct pathogen detection of the coronavirus, which can be reimbursed according to the new ordinance of the Federal Ministry of Health.

graphic

Many providers sell their tests directly, otherwise they go through pharmaceutical wholesalers and pharmacies. Pharmaceutical wholesaler Noweda reports that the well-known manufacturers of the new antigen tests in particular are experiencing temporary bottlenecks due to the particularly high demand. In general, however, the rapid tests are available, says Noweda.

The providers of this new test category include many small companies as well as the big players in the diagnostics industry such as Roche, Abbott and Siemens Healthineers. Roche, for example, started the production of antigen tests in October with a monthly capacity of 40 million units and plans to massively expand capacity over the next few months. You build as much capacity as you can and move at the absolute limit, said company boss Severin Schwan recently.

For test providers, there is a multimillion market in Germany alone. The ordinance of the Federal Ministry of Health provides for a reimbursement of seven euros per test when used in medical facilities. A refund of 15 euros is made for the work of the medical staff performing the test.

Private consumers cannot use these new tests for use at home: The Infection Protection Act only allows them to be given to medically trained personnel to ensure that the test is carried out correctly.

Antigen tests often give incorrect results

In contrast to antibody tests that detect a previous infection in the blood, antigen tests can detect an acute Sars-CoV-2 infection using a smear from the nose. And within a few minutes and everywhere, if they are offered in the form of a mobile rapid test that looks similar to a pregnancy test. Antigen tests can be carried out faster than the gold standard test with the polymerase chain reaction (PCR) in the laboratory.

However, rapid antigen tests are also criticized because they are less accurate than PCR tests – that is, they give more false results. “Rapid antigen tests are not made for mass tests,” said Mathieu Floreani, CEO of the laboratory group Synlab, in an interview with Handelsblatt.

Many infected people would not be discovered, and there would be some who test false “positive”. Above all, it is problematic if people who tested supposedly negative were certified as harmless.

Some researchers, on the other hand, argue that in some cases, a quick result is more important than accuracy, for example when it comes to quickly isolating highly infectious people and informing their contacts.

Corona rapid test

Some researchers argue that in some cases, a quick result is more important than accuracy.

(Photo: dpa)

Antigen tests are now also available for use in the laboratory. The Italian diagnostics company Diasorin offers one. And the Swiss Roche Group is also planning to launch its own laboratory-based antigen test for its laboratory analysis devices on the market in the next few weeks.

“Antigen tests are good for catching peaks in the laboratory. Their use depends on the available PCR capacities, ”says Thorsten Hilbich, Managing Director for Germany, Austria, Switzerland and Poland at Diasorin. “They could also be used more cheaply than PCR tests if certain groups of people are to be screened. For example the students in a school class in which an infection has occurred. “

According to Michael Müller, Chairman of the Board of the Association of Accredited Laboratories in Medicine, the first laboratories with a low four-digit number per week are currently using the antigen tests in the laboratories. Since the tests are only just being launched on the market, they are examined as part of the laboratory’s internal quality management to determine whether they meet the performance data specified by the manufacturer for clinical samples.

Little demand for antibody tests

On the other hand, it has become quiet about the antibody tests, which could give evidence of a previous Sars-CoV-2 disease. In the spring there were still many hopes for these tests, there was a spirit of optimism in the industry and production was boosted.

At the beginning of May, for example, Roche started antibody test production in Penzberg, Bavaria, with a large, media-effective event in the presence of Federal Health Minister Jens Spahn and Bavarian Prime Minister Markus Söder. It was said at the time that three million of these tests were to be delivered to the federal government, and later five million each.

But the tests were not called up by the ministry, as the Handelsblatt has now confirmed on request. Because the national test strategy relies on PCR and antigen tests, according to the current state of knowledge, antibody tests are not recommended for acute diagnostics either, said a spokeswoman for the Handelsblatt.

For people who do not know whether they have already suffered from Covid 19 disease – because it is symptom-free – an antibody test could theoretically be used to clarify whether a vaccination is still necessary.

Diasorin manager Hilbich does not believe that the big hour for antibody tests will come next year with the Sars-CoV-2 vaccinations: “I suspect that it will be too expensive to test the population on a large scale before vaccination who is already immune, ”he says.

“And the question of the extent to which a vaccination was successful and triggered an adequate immune response is not determined in the general population either, but in scientific studies with limited cohorts.”

Collaboration: Hans-Jürgen Jakobs

More: Synlab boss: “Corona rapid tests are used incorrectly”

.

What do you know about 2020?

What moved the world in early December 2019? Madrid welcomes the world to the UN climate conference, the French are on strike against the planned pension reform of their government and the SPD elects Saskia Esken and Norbert Walter-Borjans to lead them.

A year later, a pandemic shook the world to its foundations, and a virus changed the lives of people on every continent. Corona pandemic is the word of the year.

And otherwise? Angela Merkel is challenged as a crisis manager in her last year as Chancellor, Donald Trump has difficulty separating from the White House, the markets collapsed and came back with power, the CDU is still looking for a new chairman. The “Wirecard case” has developed into an economic scandal of the very highest order. Companies went public, others were thrown out of the Dax, board members started and had to leave.

Win attractive daily prizes

Until Christmas Eve we will present you three questions from the world of politics, business and finance every day in our large Handelsblatt quiz. Play along, face the challenge – and take the chance to win one of the many attractive daily prizes.

I hope you enjoy the quizzes,

Your Handelsblatt team

If you have any questions, please write to us at: [email protected]

.

What do you know about 2020?

What moved the world in early December 2019? Madrid welcomes the world to the UN climate conference, the French are on strike against the planned pension reform of their government and the SPD elects Saskia Esken and Norbert Walter-Borjans to lead them.

A year later, a pandemic shook the world to its foundations, and a virus changed the lives of people on every continent. Corona pandemic is the word of the year.

And otherwise? Angela Merkel is challenged as a crisis manager in her last year as Chancellor, Donald Trump has difficulty separating from the White House, the markets collapsed and came back with power, the CDU is still looking for a new chairman. The “Wirecard case” has developed into an economic scandal of the very highest order. Companies went public, others were thrown out of the Dax, board members started and had to leave.

Win attractive daily prizes

Until Christmas Eve we will present you three questions from the world of politics, business and finance every day in our large Handelsblatt quiz. Play along, face the challenge – and take the chance to win one of the many attractive daily prizes.

I hope you enjoy the quizzes,

Your Handelsblatt team

If you have any questions, please write to us at: [email protected]

.

Partial lockdown will be extended until January 10th – Söder indicates tougher measures

The time has not yet come to evaluate the measures, said Söder. “But my feeling is, and many citizens also ask me, that we mustn’t shy away from being very consistent in the end – and perhaps shorter more consistent than longer semi-consistent.” This question will still be faced in case of doubt said Söder.

.

What do you know about 2020?

What moved the world in early December 2019? Madrid welcomes the world to the UN climate conference, the French are on strike against the planned pension reform of their government and the SPD elects Saskia Esken and Norbert Walter-Borjans to lead them.

A year later, a pandemic shook the world to its foundations, and a virus changed the lives of people on every continent. Corona pandemic is the word of the year.

And otherwise? Angela Merkel is challenged as a crisis manager in her last year as Chancellor, Donald Trump has difficulty separating from the White House, the markets collapsed and came back with power, the CDU is still looking for a new chairman. The “Wirecard case” has developed into an economic scandal of the very highest order. Companies went public, others were thrown out of the Dax, board members started and had to leave.

Win attractive daily prizes

Until Christmas Eve we will present you three questions from the world of politics, business and finance every day in our large Handelsblatt quiz. Play along, face the challenge – and take the chance to win one of the many attractive daily prizes.

I hope you enjoy the quizzes,

Your Handelsblatt team

If you have any questions, please write to us at: [email protected]

.

Aid threatens to be delayed for months

Berlin, Brussels The federal government is struggling with corona aid for the companies affected by the partial lockdown. Whether the support can flow this year is uncertain, as Federal Minister of Economics Peter Altmaier (CDU) had to admit at a conference with his country colleagues. The federal government does not rule out the possibility that there will only be down payments of up to 10,000 euros per company in 2020.

Apparently, the finance and economics ministries underestimated the processes for processing aid requests. But it’s not just the technology that causes problems, there are also legal hurdles. The federal government is negotiating with the EU Commission about state aid approvals. There is still potential for conflict, especially with higher sums for companies.

Only aid up to one million euros is completely unproblematic – with government support already provided in spring and summer being included. This means that medium-sized and larger companies can quickly reach this limit. However, there is still no approval for payments of more than four million. For everything in between, the government is working on an aid scheme.

“We are in talks with the Commission and are looking for workable and legally secure solutions,” said the Parliamentary State Secretary in the Federal Ministry of Economics, Thomas Bareiß (CDU), the Handelsblatt. “All sides are aware of the urgency.” CSU General Secretary Markus Blume demanded: “We now urgently need to ensure that the aid arrives and is not slowed down by Brussels.”

At the end of October, when the lockdown light became foreseeable, Federal Finance Minister Olaf Scholz (SPD) and Economics Minister Peter Altmaier pledged generous support to those affected: companies, self-employed, institutions and associations should get up to 75 percent of their turnover from the state. The Vice Chancellor promised to help “quickly and unbureaucratically”.

Read on now

Get access to this and every other article in

Web and in our app for 4 weeks free of charge.

Continue

Read on now

Get access to this and every other article in

Web and in our app for 4 weeks free of charge.

Continue

.

Aid threatens to be delayed for months

Berlin, Brussels The federal government is struggling with corona aid for the companies affected by the partial lockdown. Whether the support can flow this year is uncertain, as Federal Minister of Economics Peter Altmaier (CDU) had to admit at a conference with his country colleagues. The federal government does not rule out the possibility that there will only be down payments of up to 10,000 euros per company in 2020.

Apparently, the finance and economics ministries underestimated the processes for processing aid requests. But it’s not just the technology that causes problems, there are also legal hurdles. The federal government is negotiating with the EU Commission about state aid approvals. There is still potential for conflict, especially with higher sums for companies.

Only aid up to one million euros is completely unproblematic – with government support already provided in spring and summer being included. This means that medium-sized and larger companies can quickly reach this limit. However, there is still no approval for payments of more than four million. For everything in between, the government is working on an aid scheme.

“We are in talks with the Commission and are looking for workable and legally secure solutions,” said the Parliamentary State Secretary in the Federal Ministry of Economics, Thomas Bareiß (CDU), the Handelsblatt. “All sides are aware of the urgency.” CSU General Secretary Markus Blume demanded: “We now urgently need to ensure that the aid arrives and is not slowed down by Brussels.”

At the end of October, when the lockdown light became foreseeable, Federal Finance Minister Olaf Scholz (SPD) and Economics Minister Peter Altmaier pledged generous support to those affected: companies, self-employed, institutions and associations should get up to 75 percent of their turnover from the state. The Vice Chancellor promised to help “quickly and unbureaucratically”.

Read on now

Get access to this and every other article in

Web and in our app for 4 weeks free of charge.

Continue

Read on now

Get access to this and every other article in

Web and in our app for 4 weeks free of charge.

Continue

.

Mecklenburg-Western Pomerania keeps the lockdown extension open – Söder suggests tougher measures

The time has not yet come to evaluate the measures, said Söder. “But my feeling is, and many citizens also ask me, that we mustn’t shy away from being very consistent in the end – and perhaps shorter more consistent than longer semi-consistent.” This question will still be faced in case of doubt said Söder.

.