Will there be a rebound in Germany in 2021? There are big questions. Today the partial blockade begins, especially in the leisure sector. The demands for another big injection of money into the economy are getting stronger.
Berlin (dpa) – In view of current concerns about the economy in Germany, Verdi’s union is calling for a second economic stimulus package against the consequences of the Crown crisis.
In essential areas, the problems and risks would weigh even more, said Verdi chairman Frank Werneke of the German press agency in Berlin. Municipalities would have to contend with a drastic drop in business tax revenue. In the case of local public transport, revenue would break. Purchase impulses are also necessary.
However, the VAT reduction should not continue, Werneke said. “The reduction of the value added tax has not brought the momentum we expected in Germany,” said the Verdi boss. Instead, consumer checks should be issued. “This would also mean that more business is not always being done online,” Werneke said.
Some time ago, Verdi had initially proposed consumer checks worth 500 euros for citizens with no or low and medium income. Checks must expire after six months. Because affected industries must be helped quickly.
Since July, the lowest tax rates have been in place for six months: 16 instead of 19 percent and 5 instead of 7 percent. The federal government wants to boost consumption in the Crown crisis. Federal Finance Minister Olaf Scholz (SPD) and Economy Minister Peter Altmaier (CDU) had already opposed an extension of the VAT cut.
Altmaier currently expects a 5.5 percent drop in gross domestic product in Germany for the current year. By 2021, the Minister of the Economy expects GDP to increase by 4.4 percent. However, according to the CDU politician, the rebound is subject to the condition of how the pandemic will continue and when a vaccine will be available.