Status: 10/14/2021 3:29 p.m.
Finance Minister Scholz and Economics Minister Altmaier wanted to save companies in the Corona crisis with unprecedented billions in aid. A year and a half later, it turns out that most of the help was not called upon at all.
Federal Finance Minister Olaf Scholz chose martial words when he presented the corona aid to the federal government in March 2020 together with Economics Minister Peter Altmaier. “This is the bazooka with which we are now doing what is necessary,” he said at the time, referring to the numerous rescue programs with a total volume of one trillion euros. The Economic Stabilization Fund (WSF) alone was filled with a gigantic 600 billion euros. However, the “Bazooka” has so far been used with significantly less power than expected. In any case, the volume of aid disbursed is far below expectations.
According to the latest information from the Altmaier Ministry, there has been a shortage since the beginning of the Corona crisis 123 billion euros (as of October 12, 2021) has been approved in aid for the economy; in addition there is the short-time work allowance in the amount of around 40 billion euros. That is a lot of money – but measured against the total amount of the already existing aid programs of 1,000 billion, it is just 12.3 percent.
Better through the crisis than feared
In the Federal Ministry of Economics alone there is still an abundance of aid programs from loans from the KfW development bank, bridging aid, restart aid, the WSF, guarantee programs and various guarantees. As of today, according to the ministry, around 21.4 billion euros in bridging aid III and around 1.46 billion euros in restart aid paid off. With this, the federal government wanted to help companies that have suffered from lost sales since the end of 2020. Nevertheless, many companies, including those from particularly troubled sectors such as tour operators, cinema operators and hairdressing salons, shied away from applying for help.
The funds disbursed for November and December are also comparatively modest at EUR 13.7 billion. According to experts, however, it is not bureaucratic hurdles that deter companies. In fact, the majority of the companies got through the crisis better than initially feared. For example, the feared wave of bankruptcies has not materialized to this day.
High equity ratio
In fact, last year the German economy slumped by almost five percent less violently than the other EU countries. On average, the eurozone’s economic output shrank by 6.3 percent in 2020. The situation of the banks and savings banks also eased the situation: this time, in contrast to the financial crisis of 2008, they were not part of the problem, but had sufficient capital to grant aid themselves.
In addition, the equity ratio of German companies has continuously improved since its low point in the financial crisis. According to the Ifo Institute, it had climbed to 45 percent by the end of 2019. Thus, when the Corona crisis broke out, many companies had sufficient reserves that allowed them to make ends meet without government aid.