Enhancing Federal Assistance for the Beneficiaries
The German government is considering enhancing coronavirus aid for businesses in the event industry and retail trade, aiming to provide additional support as these sectors continue to grapple with ongoing restrictions for infection protection [1].
According to a report published by Handelsblatt newspaper, the Ministry of Economics is examining proposals for targeted improvements to the bridging aid program, a crucial component of the federal government's economic stimulus program, designed to cushion 'corona-related revenue losses' [1].
One of the key proposals is to make the entry threshold for bridging aid more flexible due to companies not being reached due to buffer orders in April/May [1]. This move is intended to ensure that a larger number of businesses can access the aid.
The bridging aid, primarily targeted at small and medium-sized enterprises, is non-repayable and distributed based on revenue lost and the number of employees [1]. Applications for these funds require tax advisors or auditors to ensure proper use and limit abuse.
An 'umbrella' scheme, known as Novemberhilfe (November aid), was introduced during the second lockdown to support businesses, including those required to close, such as event organizers and retail stores. This scheme has been updated and extended as lockdowns continued, with new similar schemes following [1].
However, the complexity of these aid schemes and evolving eligibility rules have prompted calls for simplification and targeted support for the hardest-hit sectors [1]. There have been calls from industry representatives and some politicians for additional aid measures focused on the event and retail sectors, emphasizing aid to cover fixed costs, digital transformation, and support for reopening safely [1].
As of now, only a small fraction of the €24.6 billion euros allocated for bridging aid has been claimed, with around 66,000 companies applying for a total of one billion euros [1]. Retail trade can also anticipate additional aid, with improved bridging aid applications able to be submitted in October.
The focus of the aid enhancement is on the "bridging aid" that has been underutilized so far. Intensive discussions are ongoing between the Ministry of Economics and Finance about these proposals [1]. The government aims to address this underutilization by examining several measures, including relaxing award criteria and abolishing 'cap amounts' for companies with ten or fewer employees [1].
In summary, the German government’s coronavirus aid measures for struggling businesses, particularly in event and retail sectors, revolve around extended non-repayable grants based on lost revenue and employment, lockdown compensation schemes, and efforts to improve aid access and appropriateness for these economically sensitive areas [1].
[1] Source: Handelsblatt newspaper report on the Ministry of Economics' report to the Bundestag about the proposed changes to German coronavirus aid for struggling businesses.
The Ministry of Economics is proposing to make the entry threshold for the bridging aid program more flexible, enabling a larger number of businesses, especially in the event and retail sectors, to access the aid [1]. The focus of the aid enhancement is on the underutilized bridging aid, with plans to relax award criteria and abolish cap amounts for companies with ten or fewer employees [1].
