How businesses can access €10bn of new corona support funding
The German government has plans to help businesses and the self-employed hit by the November lockdown. Here's all the details so far.
Berlin-From Monday, 2 November, many companies across Germany will have to close their doors and stay shut for at least the rest of the month. In order to save businesses from folding completely, the German government has announced plans to support them with emergency financial aid - and is making up to €10bn available for this purpose. Economics minister Peter Altmaier said on Thursday evening that his department will be going all out with the provisions. However, several elements of the plan are still unclear. Here's what we know so far:
Who can apply for financial aid?
According to the Economy Ministrzy, companies, businesses, the self-employed, associations and institutions that are currently banned from doing business by state order or that were already banned by existing orders are entitled to apply.
In concrete terms, who does that include?
Roughly speaking, this support package has been launched to support companies in the leisure and entertainment industry. These include, for example, theatres, opera houses, concert halls and cinemas, restaurants, pubs, bars and discos, amusement parks, trade fairs, arcades and brothels, fitness studios, sports facilities and swimming pools.
What about companies that are only indirectly affected by the closures - such as wholesalers supplying the catering industry?
We don't have a clear answer on this yet. The Federal Ministry of Economics stated on Friday that this would be "clarified promptly".
How much aid will be granted?
The financial aid will be transferred as a one-off lump sum to cover fixed costs incurred despite temporary closure in particular. Each business' average weekly turnover in November 2019 will be used as a reference point. Companies with up to 50 employees will be reimbursed 75 per cent of this amount.
What about larger companies?
Larger companies are set to receive around 70 per cent of last year's November turnover. However, it may be less if the amount of the payment conflicts with EU aid directives.
Will interim aid that's already been paid be taken into account?
Yes. State support already received for the period will be offset against the new aid measures. This will also apply to Kurzarbeitergeld benefits claimed for this period, for example.
What about companies that didn't exist last November?
Recently founded companies are entitled to support too. According to the Economy Ministry, for companies founded after November 2019, turnover from October 2020 will be used as a comparison. Self-employed people will have the choice: they can use November 2019 or their average turnover from across 2019 as a reference point.
Will the aid have to be paid back?
No. As compensation for damages incurred, it does not have to be repaid.
Where and how can companies apply for support?
Applications are likely to be submitted via the nationwide IT platform for interim aid (www.ueberbrueckungshilfe-unternehmen.de) - the infrastructure there has proved its worth in recent months.
Can companies apply already?
No. According to the Economy Ministry, work on programming the application platform is in full swing. However, its details have still not been confirmed, so applications cannot yet be submitted, it was said on Friday. Ministry representatives say work is happening at full speed to get aid applications and efficient processing of grants underway as soon as possible. The possibility of an advance payment is reportedly also being considered.
Will IBB (Investitionsbank Berlin) again be responsible for paying out grants in Berlin?
We are assuming this will be the case. However, IBB has said that it has had "no binding information yet". When this question was put to the Berlin state economy ministry, their response was that Berlin was ready to implement the support plan quickly and without red tape. Talks are currently being held on the details of how the scheme will work.