Corona crisis Further help for business in sight

Status: 06/18/2021 5:51 p.m.

The states are urging to continue Corona aid for companies until the end of the year – Federal Minister of Economics Altmaier indicated readiness. Support for domestic exporters has already been extended. There are signs of an extension of the corona aid for companies that have been particularly hard hit by the pandemic. The economics ministers of the federal states demanded that the funds previously planned until the end of September be continued until the end of the year. The federal government pays the previous “Bridging Aid III”.

Extension after the summer break if necessary

Federal Minister of Economics Peter Altmaier (CDU) made it clear after a meeting with his country ministerial colleagues that he is not averse to an extension. One will look at the situation and, if necessary, extend the help after the summer break. The corona aid only applies to companies that can demonstrate a sharp drop in sales and can trace them back to the pandemic. As the economy is currently picking up again and more business is being done again, the number of companies eligible to apply is falling.

Altmaier: So far, 105 billion euros have been transferred

So far, a total of 105 billion euros have been transferred to companies as corona aid, said Altmaier. Roughly half of these are loans and half are grants that do not have to be repaid. In addition, there is money from the federal states. According to Altmaier, the state support has paid off: “Together we managed to prevent a loss of substance in the German economy.”

Against the background of the lower number of infections and the lifting of restrictions, Altmaier said the economy was “coming to a new start faster than many feared”. Growth is picking up – this year it will be 3.5 to 4 percent and in 2022 it will be more than 4 percent. The economy will have reached pre-crisis levels by spring 2022 at the latest. “That means, we are hopefully out of the worst,” said the CDU politician. When the bridging aid, which ran until the end of June, was extended by three months as “bridging aid III plus”, he was in any case in favor of continuing it until the end of the year.

Aid to exporters continues

Meanwhile, the corona aid for domestic exporters has already been extended until the end of the year. They were decided in July 2020 and should actually end this month. “Even if the economic situation has improved significantly in the past few months, the corona pandemic continues to pose challenges for the export industry,” the Ministry of Economics justified the decision. “Some companies are only now feeling the stresses with a delay.”

“Security signal” to the economy

North Rhine-Westphalia’s Minister of Economic Affairs, Andreas Pinkwart, spoke out in favor of continuing to support sectors such as the trade fair industry. After all, they would “presumably not yet be able to work in the fourth quarter in the way they normally would at normal times”. In addition, the FDP politician considers the extension of the bridging aid to be a good precaution for possible rising incidences in autumn. Then you would “not have to put on a new program from the hip”, but would have already been prepared. Saarland’s Minister of Economic Affairs, Anke Rehlinger, considers the prospect of the extension of the aid to be “a protective signal” to the economy. “We have to take care of the industries that are still suffering from the pandemic.” She stressed that the time should be used to prepare for all eventualities in autumn and winter. Should one be forced to make restrictions again because of the pandemic, there could be “other, smarter measures” that would take into account aspects such as a high vaccination rate.

Situation in trade fair industry “catastrophic”

The corona pandemic hit large parts of the German economy hard. In the meantime, things are looking a little better again, also because restrictions have been relaxed and restaurants and cafes are open again, for example. However, the situation in some sectors such as the trade fair industry is still very tense.

Jörn Holtmeier, managing director of the trade fair association AUMA, described the situation in his branch as “catastrophic”. The first industry get-togethers would take place again in September, but the number of trade fairs until the end of the year was clear. There have been many rejections. “If a stand builder finally gets another order for his first trade fair in November or December, but then does not receive any more money from the state in October, this can extremely worsen the already tense financial situation of his company.” Then company bankruptcies are possible. It is mainly about stand builders, caterers and private trade fair organizers. Exhibition companies that belong to municipalities and the state are not entitled to federal corona aid.

Around 231,000 employees

Holtmeier is also in favor of extending the aid until the end of the year. This was just a safety net, he said. “Some companies will get orders again beforehand and make sales, they will not have to use the help.”

According to AUMA, Germany’s trade fair industry has around 231,000 employees. This not only includes organizers and stand builders, but also companies with a strong trade fair business – a hotel, for example, which does most of its business with trade fair visitors, is proportionately included in the number of employees. Since March 2020, according to the Ifo Institute, the crisis in the trade fair industry has led to economic damage of an estimated 40 billion euros: Dealers could no longer buy anything at the industry get-togethers, and there were no more visitors who would spend money on restaurant visits, hotel stays or taxi rides

Nationwide electricity generation Coal is overtaking wind power again

Status: 06/11/2021 1:53 p.m.

A spring without storms has led to a decline in wind energy. Coal grew to become the most important energy source in the country in the first quarter. At the same time, the demand for electricity is increasing, says Minister of Economic Affairs Altmaier. Electricity production using coal in Germany overtook wind power again in the first quarter of 2021. According to the Federal Statistical Office, a “windless spring” resulted in almost a third less electricity from wind power. According to the authorities, the gap has been filled by increasing electricity generation from coal and natural gas power plants. From January to March inclusive, a total of 138.2 billion kilowatt hours of electricity was generated and fed into the grid. According to preliminary results from the Federal Office, that was 2.6 percent less than in the first quarter of 2020.

Coal, gas and nuclear power dominate

While the electricity in the same period last year came mainly from renewable energy sources such as wind power, biogas and sun (51.4 percent), coal, gas and nuclear energy dominated at the beginning of this year (59.3 percent). With a share of 28.9 percent of the total amount of electricity fed into the grid, coal was the most important energy source for electricity generation in Germany in the first quarter of this year. The amount of electricity generated in coal-fired power plants increased by more than a quarter (26.8 percent) to almost 40 billion kilowatt hours compared to the same period in the previous year. The amount of electricity from natural gas increased by 24 percent to 22.5 billion kilowatt hours. In contrast, there was a strong minus of almost a third (32.4 percent) in wind power: The feed-in of 33.5 billion kilowatt hours was the lowest value for this energy source for a first quarter since 2018. In the two previous years, there was wind power significantly higher values ​​achieved due to strong spring storms.

Altmaier sees increased demand for electricity

Meanwhile, Federal Minister of Economics Peter Altmaier admitted that his department had so far underestimated how much the demand for electricity in Germany is likely to increase in the course of the energy transition. “Due to the more stringent climate targets in Germany and the EU, we have to assume a significantly higher electricity demand than was previously assumed,” said the CDU politician to Wirtschaftswoche. “My house will submit new calculations for this.” Altmaier said that more energy must be produced, “from all available renewable sources: wind power and photovoltaics”. Altmaier said that he would present specific proposals on how offshore wind power on the high seas and other renewable energies could be expanded more than previously planned. For “green hydrogen” for use in the steel industry or the expansion of electromobility, many experts believe that significantly more electricity will be required in the coming years, which should come from renewable energies.

SPD puts pressure on

The SPD criticized Altmaier: “For months now, the SPD and the entire German industry and energy sector have been calling on the Federal Minister of Economics in vain to anchor realistic electricity requirements and a correspondingly ambitious expansion of wind power and photovoltaics in the EEG,” said parliamentary group vice-president Matthias Miersch of the dpa news agency. If Altmaier now announces new proposals, which can only then be implemented by the next federal government, it is “poor” and unworthy of a federal minister of economics, according to Miersch. The SPD had already submitted proposals months ago which, based on realistic electricity consumption, determine the associated expansion paths for green electricity up to 2030 and contain funds for acquiring space and accelerating it. “We could implement this next week,” said the politician.

Debate about retirement at 68 Altmaier cashes in on plans from his advisors

As of: June 8th, 2021 3:33 p.m.

Work until 68 – this proposal from the Advisory Board of the Ministry of Economic Affairs creates massive headwinds. After the rejection of the coalition partners CSU and SPD, Altmaier now expressed himself: The retirement age is currently not an issue. Federal Minister of Economics Peter Altmaier has rejected an increase in the retirement age to 68 years, as recommended by an advisory committee of his house. The retirement age was set at 67 in the first grand coalition “at the suggestion of esteemed colleague” Franz Müntefering (SPD). “It should stay that way, that’s been my opinion for years,” wrote Altmaier on Twitter.

“Suddenly increasing financing problems”

The Scientific Advisory Board of the Ministry of Economics is independent, wrote Altmaier. His proposals are not binding on either the ministry or the minister. The Scientific Advisory Board of the Ministry of Economic Affairs – an advisory body – had proposed a reform towards the retirement age at 68. Because there was a threat of “sudden increasing financing problems in the statutory pension insurance from 2025”. The retirement age cannot be decoupled from the development of life expectancy in the long term.

CSU and SPD against raising the retirement age

The CSU also rejected ideas about raising the retirement age to 68 years. “We reject a later retirement age,” said CSU regional group leader Alexander Dobrindt. In order to make pensions more secure, an “effective reform of private provision is required,” he said. This must be “more successful and efficient,” said Dobrindt. The SPD had previously rejected an increase in the retirement age. He thinks this is the wrong way, said the federal labor minister responsible for pensions, Hubertus Heil, according to a statement from his ministry. The statutory pension is a central promise of the welfare state. It is about recognition of lifetime achievement and security in old age. “Everyone must be able to rely on that.”

“Unsocial, what is proposed there”

SPD parliamentary group leader Rolf Mützenich said that a new regulation for a possible entry age of 68 does not go with the SPD. “Pensioners and the generation that will retire in the next few years must not be further unsettled.” That will also play a role in the federal election campaign. SPD Chancellor candidate Olaf Scholz said: “I stand for the fact that we are not discussing any further increase in the statutory retirement age.” Scholz spoke of a “horror scenario” which should serve to “implement pension cuts for which there is no reason at this time”. According to Scholz, not only are the calculations wrong in the report. “What is being proposed there is also anti-social,” said the minister.

Advisory board proposes retirement at 68

The representatives of the Union and the SPD reacted to an opinion from the Scientific Advisory Board at the CDU-led Federal Ministry of Economics. The Scientific Advisory Board of the Ministry of Economic Affairs – an advisory body – had presented a concept that provides for longer work in old age and a limitation on future pension increases. The proposal mentioned a retirement age of 68 years in 2042. Currently, the rule applies that the age for entry into retirement without deductions should increase to 67 years by 2030. The advisory board warned that the pension system would head for a “financing shock” without further increases.

Employer President: “Lead honestly” pension discussion

Employer representatives were open to the experts’ suggestion. Employer President Rainer Dulger said with a view to demographic development that one should not get into a situation in which there are more service recipients than service providers. “The discussion must be conducted and it must be conducted honestly,” said Dulger. The topic cannot be concluded with stubborn rejection. People who would like to work longer should also be included in the discussion.

DGB and left indignant

The SPD gets a tailwind from its criticism from the German Trade Union Confederation (DGB) and the Left Party. The advisory body wants to “drastically cut pensions, dismantle the welfare state and privatize old-age pensions – all of this to massively relieve employers,” said DGB board member Anja Piel of the “Neue Osnabrücker Zeitung”. She accused the body of announcing the imminent ruin of the state on the basis of a fictitious legal status in order to then justify radical reforms. This is not scientifically based advice, but political propaganda. “From this oblique perspective, those affected are to blame if the pension is not enough: they could have made more private provisions,” said Piel. Left party leader Susanne Hennig-Wellsow spoke of an “asocial Oberhammer.” The left will “defend the rights of pensioners with tooth and nail”. What would be necessary would be a clear pension guarantee that bindingly excludes pension cuts as a result of the corona pandemic, said Hennig-Wellsow.