New Corona aid program: State buys winter goods from traders

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The federal government wants to significantly increase the corona aid for companies in some cases.

Retailers, such as sellers of winter clothing, who, because of their closed shops, are left sitting on jackets, sweaters and boots en masse, should benefit from this.

The state largely pays for these seasonal goods, which can hardly be sold later in the year.

It is envisaged that dealers will be able to offset 100 percent of the expenses in addition to rent or insurance costs against the uncovered fixed costs, which the federal government will reimburse up to 90 percent.

That means: A retailer who has made a high loss due to the Corona restrictions will receive up to 90 percent of the purchase price reimbursed.

For example, if a ski jacket cost 100 euros to buy, the retailer receives 90 euros from the state for these goods, which are now not for sale in the warehouse.

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As a result, the dealers should receive important liquidity despite closed stores to pay for the already urgent spring fashion.

The maximum funding under Bridging Aid III, which applies from January to June, is to be increased from the current EUR 500,000 to EUR 1.5 million per month.

All of this is part of the expanded aid package, the details of which were discussed by representatives of the Ministry of Economics and Finance at the beginning of the week.

It is related to the extension and possible tightening of the corona restrictions, which the Federal Chancellor and the 16 prime ministers want to agree on on Tuesday.

The amount of funding continues to be staggered

In the past few days there has been a lot of criticism from companies that the Corona aid is flowing too slowly and too sparingly.

Overall, the help should be more generous and simple.

"The differentiation between 'companies affected by closure' and 'other companies' as a criterion for eligibility to apply should be eliminated," said the Federal Ministry of Economics.

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Now all companies receive funding for every month in which they can prove a drop in sales of at least 30 percent.

Additional documents are no longer required.

However, the amount of funding is still staggered.

"Those who have the higher damage / loss also receive more funding than those who are less affected," said the ministry of Peter Altmaier (CDU).

However, the prerequisite for the changes, especially the tripling of the maximum funding amount to 1.5 million euros, is that the EU Commission approves them.

State aid law plays an important role here.

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Greater help is also planned for the self-employed.

So far, you can apply for a lump sum of up to 5000 euros as part of bridging aid III.

The grant, also known as “restart aid”, amounts to a one-off 25 percent of the average monthly turnover.

The quota should now increase to 50 percent and the upper limit to 7500 euros.

Source: WORLD infographic

In addition, politicians respond to criticism that the down payments are too low.

The advance transfers are capped at 50,000 euros for the first month.

This maximum amount is now to be increased to 100,000 euros for the first month or 150,000 euros spread over the first three months, according to the proposals.

EU Commission still has to vote

At first nothing was heard from the two ministries about the additional costs that are expected from the increase in aid.

"The money will last as long as it is necessary," said Federal Finance Minister Olaf Scholz (SPD) simply.

In the past few weeks it has already been shown that the assistance provided was calculated more generously than it was ultimately used.

For November aid, only applications with a total volume of just under five billion euros have so far been submitted.

The Ministry of Finance had budgeted around 15 billion euros.

The situation is similar with the December aid.

All in all, aid amounting to around 20 billion euros has not even been applied for.

This is also due to the fact that large companies, for example hotel chains, cannot apply for November or December aid in mid-January, as the EU Commission still lacks approval for payments of more than four million euros.

According to reports, approval is to be expected in the coming days, government circles were confident.

Then the number of applications and, above all, the amount of the requested amounts for this special aid for the months of November and December could increase again significantly.

The buffer in the federal budget for 2021 is initially large enough: just under 40 billion euros are earmarked for corporate aid.

In addition, there is another 35 billion euros in general economic aid, most of which can also be used for direct grants for companies.