Germany plans 25 billion euros extra in aid for the future business crisis.

The German government says it will provide crisis-hit of small and medium-sized businesses with 25 billion euros (28 billion dollars) of additional state aid in a bid to stave off a looming wave of bankruptcies on Friday.

According to the Ministry of Economy, the interim cash injection is aimed at small businesses in the hospitality and gastronomy sectors, as well as professional sports clubs in the lower leagues and institutions helping the disabled.

The government will help cover businesses’ fixed overheads from June to August in cases where turnover in April and May fell by at least 60 percent compared with the same period last year.

The amount of help available will increase if the firms have seen a greater slump in sales, with individual businesses able to apply for a maximum of 150,000 euros over three months.

The move comes as Germany debates pumping historic amounts of state aid into the economy to shore up businesses in the wake of closures during the coronavirus pandemic.

The Economy Ministry justified Friday’s additional help for small businesses, saying grants were needed rather than loans as firms would be unable to make up for weeks of profits lost in the pandemic.

The measure must now be drafted into law before being brought back before the cabinet and parliament for approval.

The announcement came as a survey showed the majority of Germans were satisfied with a 130-billion-euro stimulus package agreed by the government last week.

Around two thirds, or 75 percent, of those surveyed by broadcaster ZDF said they approved of the stimulus package, compared with 22 percent who did not and 10 percent who said they did not know.

About half of those surveyed said they thought 130 billion euros was the right amount, compared with 17 percent who said the figure was too high and 14 percent who said it was too low.

However, a separate travel industry survey showed 82 percent of businesses said they felt the government had not made a decisive contribution to their overcoming challenges in the pandemic.

Half of the around 500 respondents were disappointed overall by government’s economic stimulus package, the DRV travel industry association said on Friday.

 

 

NAN