Germany speeds up disbursement of coronavirus aid in December

BERLIN (Reuters) - Germany is speeding up the disbursement of coronavirus aid for lockdown-affected firms this month by lifting the threshold of an initial payout which comes with less bureaucratic paperwork, government officials said on Tuesday.

German Chancellor Angela Merkel attends a session at the lower house of parliament Bundestag in Berlin, Germany, December 8, 2020. REUTERS/Michele Tantussi

Chancellor Angela Merkel and state leaders have agreed to extend restrictive measures designed to stem a tide of new coronavirus infections until Jan. 10.

The measures, which had been put in place since Nov. 2, have forced restaurants, bars, hotels, gyms and entertainment venues to close. But factories, shops and schools remain open.

The government has earmarked 15 billion euros ($18 billion) for November and 17 billion euros for December to compensate affected firms through a scheme which entitles them to claim up to 75% of their monthly sales.

The programme has been welcomed as relatively generous, but companies have still complained that the money is not flowing fast enough.

That is why Finance Minister Olaf Scholz and Economy Minister Peter Altmaier agreed to raise the threshold of the initial payout of coronavirus aid to 50,000 euros from 10,000 euros, government officials told Reuters.

A large part of aid applications would be covered by this higher threshold as most firms are not so big that they would be entitled to claim more than 50,000 euros, they added.

Scholz and Altmaier earlier on Tuesday defended the government’s decision to finance their rescue and stimulus measures with record new borrowing this year and next against criticism from opposition lawmakers.

Lawmakers are expected to suspend debt limits in the constitution again later on Tuesday to allow the government net new borrowing of up to 180 billion euros ($218 billion) in 2021 to finance more measures to shield Europe’s largest economy from the COVID-19 pandemic.

The debt figure is the second-highest in post-war Germany and comes after the Bundestag lower house of parliament this year suspended the debt brake to allow net new borrowing of up to 218 billion euros in 2020.

Reporting by Holger Hansen and Michael Nienaber, editing by Emma Thomasson and Angus MacSwan