Business support Only a few corona aid accessed

Status: 06/17/2021 10:08 a.m.

The federal government had made available 150 billion euros for companies as corona aid in grant programs – according to the Ifo Institute, just 24 percent of this was accessed. Companies in Germany have so far called on much less Corona aid than planned by the federal government. “Only a fraction of the budgeted aid was paid out to the companies affected by the corona pandemic,” said Selina Schulze-Spüntrup, researcher at the Ifo Institute. “That also has to do with the fact that some of the eligibility requirements were formulated quite strictly to rule out abuse.” According to the information, the federal government provided 150 billion euros in grant programs. Of this, 24 percent have so far been accessed. For emergency aid from the federal government, 50 billion euros were estimated, according to Ifo, less than a third of it was used.

Bridging aids were also not exhausted

In the case of the subsequent bridging aid, too, the money paid out was well below the budgeted amount: According to economic researchers, it was 6 percent for bridging aid I, around 10 percent for bridging aid II, and a good 28 percent for bridging aid III.

56 percent of the available funds were paid out of the November aid, 33 percent of the December aid. The state-owned KfW Bank has so far pledged 46 billion euros from its special program.

The switch to electric vehicles will affect at least 178,000 jobs in the German auto industry. Photo: VNA Ifo’s research presents a number of potential challenges in the future as governments work to phase out diesel and gasoline-powered vehicles in favor of low-emissions, even zero-emission vehicles. waste. In a statement released alongside the report, Ifo said an estimated 75,000 workers in Germany’s car manufacturing sector will retire by the middle of the decade. But if by 2025, the production of cars powered by internal combustion engines falls to levels previously predicted under current emissions regulations, the switch to electric vehicles will affect little. 178,000 jobs in the German auto industry. This group, Ifo explained, would include workers manufacturing product groups directly or indirectly dependent on internal combustion engines, with 137,000 of these working directly in the auto industry. Ifo President Clemens Fuest described the transition to electric vehicles as a major challenge, especially for auto parts suppliers as midsize companies dominate the sector. . He assessed that it is important to maintain skilled jobs in the production of vehicles using internal combustion engines and electric vehicles without changing the industry structure. The report comes after the German federal government announced its ambition to have 7-10 million new registered electric vehicles in the country by the end of the decade. In January 2021, Germany’s road traffic regulator said sales of electric vehicles in Germany will be more than 194,000 units in 2020, a threefold increase from the previous year. Internationally, the European Commission has also expressed its desire to have at least 30 million zero-emissions cars on the road by 2030, as part of its “Smart and Sustainable Transport Strategy.” . According to the International Energy Agency, about 3 million new electric cars were registered last year, a record number and up 41% from 2019.

Illustration. https://kinhtexaydung.petrotimes.vn The Munich-based Ifo Institute said: The German Automotive Industry Association has presented some potential challenges ahead, as the government attempts to eliminate diesel and gasoline-powered vehicles instead. for vehicles with low and zero emissions. In a statement released with the report, the research agency said: “It is estimated that about 75,000 German auto manufacturing workers will retire by the middle of this decade. But if by 2025, production of cars powered by internal combustion engines decreases to a predictable level under current emissions regulations, the shift to electric motors will have little impact. 178,000 employees ”. Ifo explains: the group that will be unemployed includes “workers producing product groups directly or indirectly dependent on internal combustion engines, with 137,000 of them working directly in the automotive industry” . “The transition to electric automation is a huge challenge, especially for automotive suppliers where mid-sized companies dominate,” said Ifo Chairman Clemens Fuest. “It is important to maintain skilled jobs in the manufacturing of internal combustion engines and electric vehicles without altering the structure,” he said. A real major transformation seems to be ahead. The German federal government has set a target of 7 to 10 million electric cars registered in the country by the end of the decade. In January, the German road traffic authority Reuters said: Battery-powered car sales were more than 194,000 vehicles by 2020, which had tripled over the same period last year. The executive branch of the EU, the European Commission wants to have at least 30 million zero-emission cars on the road by 2030 as part of the “Smart and Sustainable Mobility Strategy”. About 3 million new electric cars were registered last year, a record number and up 41% from 2019, according to the International Energy Agency. Oliver Falck, Director of the Ifo Center for New Industries and Technologies, sought to emphasize systemic change that has been and is taking place. “The evolution in production figures has shown us that very different parts are needed for electric cars rather than the internal combustion engines,” he said, noting that “this shift has yet to be reflected in the similar level in number of employees ”. https://kinhtexaydung.petrotimes.vn

In Germany, business sentiment improved slightly in April, but the data from the Ifo Business Climate is not a real step forward: the index rose by 0.2 points compared to the previous month to 96.8 points, according to the Munich institute. After all, this is the highest value since June 2019. However, experts had expected a stronger increase to an average of 97.8 points. Nevertheless, the third rise in the leading indicator in a row is usually interpreted by economists as an economic turning point. The data also shows that the companies rated their current business situation better. The prospect of the coming six months, however, has clouded over.

Ifo Business Climate Index April 2021

The effect of the third wave

“The third wave of infections and bottlenecks in preliminary products are dampening the recovery of the German economy,” commented Ifo President Clemens Fuest. As in the past few weeks, the results vary depending on the sector. Things are still going very well for the industry, but optimistic expectations have been dampened. “45 percent of the companies reported bottlenecks in preliminary products – that is the highest figure since 1991,” emphasized Fuest. In manufacturing, however, the business climate improved to its highest level since May 2018. Capacity utilization increased significantly to 86.2 percent and is thus above the long-term average for the first time in almost two years. The industry is booming, but the bottlenecks in intermediate products such as semiconductors are the downside, said Ifo economic expert Klaus Wohlrabe. There is sand in the gears when it comes to procurement, across almost all industries.

Service sector worries

In the service sector, the mood clouded over again somewhat. The companies were less satisfied with their current situation. “Even the optimism that had recently emerged has disappeared again.” While the logistics sector is benefiting from the upswing in industry, the hospitality and tourism sectors in particular suffered from the lockdown. In the retail sector, the business climate picked up slightly – not least because of the better location at car dealerships, for example. With a view to the coming months, however, pessimism has noticeably increased again. According to the Ifo, the mood among companies also deteriorated in the construction industry.

Bottlenecks and delivery problems

“The catching-up process is stalling a bit,” commented Jens-Oliver Niklasch, economist at LBBW. Probably this has to do with the uncertain development of the pandemic and the response of politics to it – keyword “Easter rest”. Michael Holstein, chief economist at DZ Bank, said the current survey shows that the export-driven boom in German industry is continuing. “Due to the global demand for industrial goods, the bottleneck is noticeable in important intermediate products such as memory chips. It could take months to overcome the delivery problems, which is why the outlook is somewhat gloomy.” “The recovery should only gain real momentum when the lockdown is noticeably relaxed, which we expect from the end of May,” commented Jörg Kramer, chief economist at Commerzbank. Then consumers would probably dissolve part of the forced savings, which, according to our estimates, now amount to seven percent of their annual income.

Cities are suffering particularly badly economically from the Corona crisis. In them, unemployment rose faster and the business climate deteriorated more than elsewhere, as a study by the Munich Ifo Institute shows. The unemployment rate in major German cities rose by almost 1.5 percentage points from January 2020 to August 2020. In rural areas it only increased by 0.3 to 0.8 points. By the end of the observation period in December 2020, the situation had eased somewhat, “the cities, however, were still clearly the worst,” said the head of the Ifo Center for Macroeconomics and Surveys, Andreas Peichl, explaining the result. The researchers examined four regional so-called clusters, each with similar demographic, structural and infection-related characteristics.

More services, less industry

The main reason for the poor location of the cities is the different economic structure compared to rural regions. The cities are dominated by services, retail, hospitality and tourism, sectors most affected by the restrictions of the pandemic. In contrast, there is even more industry and manufacturing in rural areas and small towns, which have recovered particularly strongly after the first lockdown in the spring of last year. The high proportion of stationary retail – a loser from the pandemic – in the value added in cities is also proving to be a burden. On the other hand, large online retailers like Amazon are the winners, but are more likely to be based near highways in the countryside. These differences within industries could explain the observation that cities are worse off in the pandemic, according to the Ifo study.

Tourism vulnerability

Another weak point is the dependence on tourism. While the cities host many business travelers and foreign visitors in normal times, rural tourism – at least in summer 2020 – will primarily benefit from domestic travelers. A closer look at the hotel companies in the Ifo company surveys confirmed this. In addition: the infection rate was higher in the second wave in the cities than in the countryside, emphasizes the Ifo Institute – with fatal consequences. “The occurrence of infections could have increased the fear of infection and thus intensified the slump in consumption,” said the authors of the study.

How lasting is the effect?

The authors of the study write that it is not yet possible to assess whether cities will continue to lose out from the corona crisis in the long term. “On the one hand, cities should benefit more than average from any catch-up effects after the crisis, when retail stores can open and social consumption is possible again.” On the other hand, trends such as home office and digitization could make central city locations less attractive from the point of view of companies, “so that they migrate to cheaper rural areas”. A potential wave of bankruptcies, for example in the catering industry, could also affect cities more and thus make them less attractive. After all, an improvement in the economic situation in Germany and especially in the cities can only be achieved through sustainable containment of the pandemic, explain the Ifo researchers.