Bridging aid: What corona support the economy is hoping for in the new year

Berlin Fewer walk-in customers and delivery problems in the Christmas business, canceled New Year’s Eve parties, important trade fairs that only take place virtually: retailers, restaurateurs and event managers are not looking more optimistically into the new year at the turn of the year than they were at the end of 2020.

“The mood in our industry is devastating,” says the general manager of the Hotel and Restaurant Association (Dehoga), Ingrid Hartges. “Companies have zero planning security.” The highly contagious Omikron variant and the debate as to whether it will force a new lockdown exacerbates the situation and creates uncertainty.

Business associations are pushing all the more not to leave companies alone in this uncertain and tense situation. “All companies – regardless of their size – must now be given the support that will hopefully ensure their survival during the last few meters of the pandemic,” Hartges emphasizes.

To this end, the federal government wants to modify bridging aid III plus and issue bridging aid IV for companies with a loss of more than 30 percent in sales. It should initially apply to the months of January to March and start with the reimbursement of fixed costs. The restart assistance will be continued for self-employed individuals. The Federal Ministry of Economics wants to publish details of the funding conditions “promptly”.

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The continuation of the aid is “a clear signal that the state is maintaining its protective shield and compensating for losses through no fault of its own,” says the economic policy spokesman for the Green parliamentary group, Dieter Janecek.

Talks with the showman and event industry

As part of the bridging aid, companies affected by closings received, in addition to the reimbursement of fixed costs, an improved equity grant in order to be able to cope with canceled Christmas markets, for example. Further talks were taking place with the hard-hit showman and event industry, emphasized Janecek.

For the opposition, however, the government’s plans do not go far enough. The SPD, Greens and FDP would have to expand the corona aid, especially for companies with severe sales losses, and examine how the sometimes severe failures in the Christmas business could be better absorbed, says the economic policy spokeswoman for the Union parliamentary group, Julia Klöckner (CDU): “The traffic light coalition should do this as soon as possible Have talks with the EU Commission and get this step approved. “

For reasons of state aid law, the approval of the Brussels authority is required for corona aid. The Commission has just increased the permissible limit by 2.5 million euros. A company or group of companies can in future receive a maximum of 54.5 million euros in funding across all aid programs. It is a maximum of ten million euros per month.

Many retail companies had already exhausted the applicable maximum limits in the course of the previous lockdowns, complains the chief executive of the German Retail Association (HDE), Stefan Genth. Therefore a doubling is “long overdue”.

Retailers worry about existence

Shortly before the turn of the year, retailers in the non-food sector are becoming increasingly fearful of their existence. “That is why there is a need for appropriate economic aid that corresponds to the reality of life in the retail sector.” This includes that funding should not start with at least a 30 percent loss of sales. In addition, it must be carried out “to the day”. “There is an urgent need to adapt to economic aid in many areas,” emphasizes Genth.

Handicraft President Hans Peter Wollseifer goes one step further. He welcomes the fact that the federal government intends to support companies with Bridging Aid until the end of March next year. “But we would prefer if the aid was based on the November and December aid again,” said Wollseifer to the Handelsblatt. Because the currently applicable bridging aid III plus, which is essentially being continued, does not compensate for the costs actually incurred in the companies .

As part of the November and December aid granted last year, companies affected by closings were reimbursed unbureaucratically up to 75 percent of the respective comparable sales from the previous months. The industries concerned gratefully accepted the instrument at the time, but it was also very expensive.

Of the total of a good 60 billion euros that the federal government has now disbursed in support, a good quarter went to the November and December aid alone. There was also criticism that, for example, closed restaurants were able to have a large part of the previous year’s sales reimbursed even though they did not have any expenses for purchasing goods. It is unlikely that the traffic light will revive the instrument.

In addition, the granting offices of the federal states are currently checking the eligibility to apply for the November and December aid on a random basis. Companies that have applied for help from a tax advisor or auditor must submit a final statement by the end of next year.

It could therefore happen that companies are still confronted with repayment claims – as is currently the case with the emergency aid that was paid at the beginning of the pandemic in spring 2020. As the Handelsblatt had reported, the federal states and promotional banks responsible for processing are demanding a total of around 288 million euros in emergency aid from the applicants – in the middle of the pandemic.

The Association of Founders and Self-Employed Germany (VGSD) has little understanding for this. The reclaims would come “at the worst possible time,” says CEO Andreas Lutz. It is therefore a good thing that Federal Economics Minister Robert Habeck (Greens) has asked the federal states to adopt a moratorium.

The self-employed have to choose between an apartment and an office

Lutz welcomes the fact that the federal government is continuing the bridging aid and the restart aid. However, the aid is mutually exclusive, so that the self-employed affected would still have to decide almost two years after the start of the pandemic whether they wanted to apply for compensation to finance their private living costs or their operational costs.

“You basically have to decide between renting an office or an apartment, and finance the other from your savings or your old-age provision,” says Lutz. “You should be a little more generous towards those who have been in dire straits for so long.”

In any case, the industries that continue to suffer from the consequences of the pandemic hope that there will not be another lockdown. Although the Omikron variant is causing concern, the numbers of new infections and hospital admissions are currently falling, says Dehoga CEO Hartges. “That is why it would be disproportionate to intervene preventively with occupational bans and company closings.”

“Another blanket lockdown is not a solution,” says HDE managing director Genth. The federal and state governments have made this clear with their latest decision.

Green economic politician Janecek is currently still optimistic, even if Chancellor Olaf Scholz and Health Minister Karl Lauterbach (both SPD) do not want to draw red lines in the fight against pandemics and therefore do not fundamentally rule out a lockdown.

“The latest scientific findings on Omikron give hope, which assume a significantly lower hospitalization rate than the Delta variant, so that a lockdown can hopefully be avoided in the new year,” says the economic politician.

More: Lauterbach: The need for rapid tests is covered

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