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COVID-19 Response EU Response EU Member States Response to the COVID-19 Pandemic: Germany

EU Member States Response to the COVID-19 Pandemic: Germany

by Simion & Baciu Law Firm June 12, 2020

Website simionbaciu.ro

  1. Tax estimators expect a massive drop in government revenue. Around 100 billion euros less could flow into state coffers this year compared to 2019, with the tax relief for companies having an impact. Federal Finance Minister Olaf Scholz rejects austerity policies. (https://www.zeit.de/wirtschaft/2020-05/staatshaushalt-corona-steuerausfall-wirtschaftskrise-steuerschaetzung & https://www.zeit.de/wirtschaft/2020-05/steuerschaetzung-steuereinnahmen-81-milliarden-euro-niedriger-als-2019) 

  2. Billions in aid are planned for Deutsche Bahn (german railway company). Due to the Corona crisis, Deutsche Bahn is missing several billion euros. The federal government should be ready to take over 80 percent of it. Railroad board members would forego bonuses. (https://www.zeit.de/mobilitaet/2020-05/corona-krise-deutsche-bahn-eigenkapitalerhoehung-wirtschaftliche-folgen) 

  3. According to the economic stimulus package, VAT is to be temporarily reduced to 16% for six months, and the VAT for hotels and restaurants to 7%. According to sales representatives, this means major challenges for companies and customers. Cash register systems would have to be reprogrammed, price tags replaced and advertising redesigned, which means "comparatively high expenditure". (https://www.zeit.de/wirtschaft/2020-06/konjunkturpaket-mehrwertsteuer-absenkung-handel-millionenkosten-coronavirus &  https://www.biziday.ro/germania-isi-va-reduce-pentru-sase-luni-tva-ul-la-16-iar-cel-pentru-hoteluri-si-restaurante-la-7-va-acorda-tuturor-familiilor-o-prima-de-300-de-euro-pentru-fiecare-copil-si-va-dubla-subventiile-pent/) 

  4. Border controls introduced at the german federal borders due to Corona are to be lifted by June 15. Austria also wishes to revive its tourism. (https://www.zeit.de/politik/deutschland/2020-05/reisebeschraenkungen-grenzoeffnung-oesterreich-deutschland-corona-pandemie) 

  5. Germany's economy is falling into recession. In the first quarter, GDP fell by 2.2 percent due to the corona crisis. This is the sharpest decline since the financial crisis. Unemployment is not yet increasing. (https://www.zeit.de/wirtschaft/2020-05/statistisches-bundesamt-bip-sinkt-im-ersten-quartal-um-2-2-prozent-coronavirus-krise)

  6. Germany is expected to lift the worldwide travel warning for its citizens in mid-June, according to Federal Foreign Minister Heiko Maas (SPD). Maas said after a video conference with his European counterparts that the travel warning could be replaced by country-specific travel advice from June 15 . However, it is still too early to say in which countries summer vacations are most likely to be possible. (https://www.zeit.de/entdecken/reisen/2020-04/reisewarnung-verlaengerung-sommerurlaub-auswaertiges-amt-bundesregierung) 

  7. At the cabinet meeting, the federal government agreed on an extension of continued wages for mothers and fathers in the corona crisis. Parents who are unable to work due to corona-related daycare and school closures receive wage replacement from the state for significantly longer, up to 20 weeks for single parents. (https://www.zeit.de/video/2020-05/6157969001001/corona-krise-verlaengerung-der-lohnfortzahlung-fuer-eltern) 

  8. A stimulus package worth 150 billion euros is planned by the federal government and is to be announced in June. In order to boost purchasing power after the Corona crisis, a family bonus will be included in the stimulus package in which  parents should receive a one-off payment of 300 euros for each child. (https://www.zeit.de/wirtschaft/2020-05/corona-konjunkturpaket-bundesregierung-abwrackpraemie-gutscheine-strompreissenkung)

  9. The Minister of Economy and CDU chief want to use the Corona crisis for reforms. FDP and Greens argue about taxes, the unions demand better infrastructure. (https://www.zeit.de/wirtschaft/2020-05/konjunkturpaket-corona-krise-sozialabgaben-internetanschluss-modernisierung)

  10. Federal Minister of Economics Peter Altmaier (CDU) wants to support medium-sized companies even more because of the corona pandemic. As reported by the Neue Osnabrücker Zeitung (NOZ) , companies with up to 249 employees should be able to get up to EUR 50,000 a month from June to December. (https://www.zeit.de/wirtschaft/unternehmen/2020-05/corona-hilfen-coronavirus-mittelstand-ueberbrueckungshilfe-schliessungen) 

  11. Tourism is permitted again in some german Lands. Hotels and campsites are open in Mecklenburg-Western Pomerania, Berlin, Brandenburg and Lower Saxony. However, distance rules still apply. (https://www.zeit.de/wirtschaft/2020-05/ommerurlaub-2020-tourismus-reisen-deutschland-lockerungen-coronavirus-hotels) 

  12. The federal government and Lufthansa are said to have agreed on the rescue package, worth 9 billion euros. According to reports, the federal government wants to take a 20 percent stake in the airline. Also, the Federal Government and the EU Commission reached a compromise on the requirements for the rescue package. Lufthansa is said to hand over some take-off and landing rights at Frankfurt and Munich airports. (https://www.zeit.de/wirtschaft/2020-05/staatshilfen-coronavirus-lufthansa-rettungspaket-fluglinie-tourismus &  https://www.zeit.de/wirtschaft/unternehmen/2020-05/lufthansa-rettungspaket-bundesregierung-corona-wirtschaftskrise &  https://www.zeit.de/wirtschaft/unternehmen/2020-05/lufthansa-corona-krise-rettung-eu-kommission-landerechte)

  13. Inflation in Germany at its lowest level in four years. The global economy is slumping and energy prices are falling. As a result, the inflation rate in Germany fell to 0.6 percent in May. But food has become more expensive. (https://www.zeit.de/wirtschaft/2020-05/statistisches-bundesamt-inflationsrate-energie-corona-krise) 

  14. The retail trade in Germany suffered a sharp drop in sales due to closed shops , as the Federal Statistical Office has just announced. In April, sales decreased by 6.5 percent on a like-for-like basis compared to the same month in the previous year. Compared to the previous month of March, sales fell by a good 5 percent - this is the strongest decline compared to a previous month since January 2007. (https://www.zeit.de/wirtschaft/unternehmen/2020-05/rezession-einzelhandel-corona-krise-umsatzrueckgang-selbstaendige) 

  15. Health insurance companies do not want to pay for corona mass tests. The health insurance companies warn that the planned expansion of the corona tests could cost up to 7.6 billion euros. The federal government would have to step in, otherwise there would be higher contributions. (https://www.zeit.de/wissen/gesundheit/2020-06/corona-massentests-krankenkassen-gesundheitsfond-finanzierung-beitragserhoehung)

  16. In May, 7.3 million people in Germany were on short-time work, according to exclusive calculations by the Ifo Institute. "This number has never been so high," says Ifo labor market expert Sebastian Link. "In the financial crisis, short-time working peaked in May 2009 at just under 1.5 million people." In the corona crisis, companies originally registered 10.1 million workers for short-time working. According to data from the Ifo Institute, 71.6 percent of them were actually sent on short-time work. (https://www.ifo.de/node/55800)

  17. The number of unemployed in Germany rose again in May due to the consequences of the Corona crisis compared to April by 169,000 to 2,813 million people. The unemployment rate rose by 0.3 points to 6.1 percent, said the Federal Employment Agency in Nuremberg. Compared to May 2019, the number of unemployed was 577,000 higher. (https://www.zeit.de/wirtschaft/2020-06/bundesarbeitsagentur-arbeitslosenzahl-steigt-im-mai-um-169-000) 

  18. Innkeepers in St. Pauli want to use the parking spaces on their street as a terrace to compensate for losses due to Corona. Now only the neighbors have to agree. (https://www.zeit.de/hamburg/2020-06/gastronomie-corona-wirtschaftskrise-st-pauli-paul-roosen-strasse)

  19. In the past few weeks, the number of Corona patients receiving intensive medical care has decreased significantly. According to the intensive care register of the German Interdisciplinary Association for Intensive Care and Emergency Medicine (DIVI), as of June 2, 689 people suffering from Covid-19 were cared for in intensive care units - about half of them were ventilated. In mid-April, more than 2,900 patients had been in the intensive care units at times. According to the RKI, the number of reproductions, or R-value for short , has dropped below the critical mark of 1.0, namely to 0.89. This means that an infected person infects less than another person on average.  (https://www.zeit.de/wissen/gesundheit/2020-06/coronavirus-infektionszahlen-niedrig-r-wert-goettingen) 

  20. Investment backlog in local authorities rose to 150 billion euros. Schools and road construction alone require investments of more than 80 billion euros. Municipalities also see a great need for digitization. (https://www.zeit.de/wirtschaft/2020-06/konjunkturpaket-kfw-kommunalpanel-investitionen-corona-wirtschaftskrise) 

  21. Climate policy is now mainstream. Unlike in the 2008 financial crisis, climate protection plays a surprisingly important role in the new economic stimulus package. (https://www.zeit.de/wirtschaft/2020-06/konjunkturpaket-klimaschutz-klimaziele-wirtschaftskrise-klimapolitik) 

  22. The tracing app is scheduled to be released in Germany in June. The left in the Bundestag is committed to regulating the use of the Corona warning app by law. (https://www.zeit.de/politik/deutschland/2020-06/covid-19-linke-bundestag-warn-app-gesetz) 

  23. Germany plans to extend a travel ban for non-European countries until Aug. 31, government sources told Reuters, adding Berlin was also strongly advising against any cruises due to the special risks related to coronavirus. (https://www.reuters.com/article/us-health-coronavirus-germany-restrictio/germany-to-extend-virus-related-travel-ban-for-non-european-countries-idUSKBN23G2NZ) 

  24. Lufthansa will be laying off 22,000 employees, from which half will be from Germany. (https://economie.hotnews.ro/stiri-companii-24051474-lufthansa-disponibilizeaza-22-000-angajati.htm) 

  25. Germany will need two years to recoup growth lost in recession, Bundesbank says. (https://www.reuters.com/article/us-germany-economy-bundesbank/germany-will-need-two-years-to-recoup-growth-lost-in-recession-bundesbank-says-idUSKBN23C0PO) 

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