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Germany Estimates To Pay 22 Bn Euros As Pandemic Aid Firms In First Half Of 2021

Germany Estimates To Pay 22 Bn Euros As Pandemic Aid Firms In First Half Of 2021
A total of about 22 billion euros ($26 billion) is expected to be paid out by the German government as Covid-19 relief aid from January to June next year. It is expected that this huge amount of money would be given to companies and self-employed people as the government expects the impact of the pandemic to extend to next year, claimed multiple reports quoting people close to the matter.
The reports also said that by this month, the pandemic aid package that was announced by Germany in November for compensating companies impacted by the pandemic induced lockdown measures amounted to 14 billion euros. The German government had initially expected to make a pay out of about 10 billion euros for this purpose.
It is also expected that the German economy will shrink less than what had been estimated initially for the current year, according to the estimates of German government's council of economic advisers, because of a strong summer. However it also said that the growth outlook for 2021 is being clouded by a second wave of the Covid-19 pandemic.
German firms would be able to get up to 200,000 euros a month which they can use as expenses to address their fixed costs such as rent, as a part of the new round Covid-19 relief package. On the other hand, sole entrepreneurs can get up to 5,000 euros.
German Finance Minister Olaf Scholz had said on Thursday that to counter the impact of the pandemic on the largest economy of Europe, there is enough fiscal firepower with available with Germany to launch more rescue and stimulus measures
Scholz said that a total borrowing of more than 300 billion euros for this year and the next is expected to be made by the German government. But which relief measures make sense has to be carefully considered by the government, Scholz added.
The outright, non-repayable monetary support that has been extended by the German government to its companies and citizens now amounts to about 8.3 per cent of its total annual economic output, according to calculations by Brussels based think tank Bruegel. In comparison, the United States has expended about 9.1 per cent of its gross domestic product for in absolute non-repayable support to businesses and individuals.

Christopher J. Mitchell

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