Berlin (dpa) – Stay out of it, but plop, that was the announcement of the federal government in November aid. With around 10 billion euros, the federal government wants to help companies that have to close their business in the fight against the spread of the coronavirus.
But now there is a growing dispute between the federal states and the federal government: Are there many companies in danger of being forgotten? More and more countries are calling for improvements, especially regarding the scope of aid to indirectly affected companies.
In a letter to Federal Finance Minister Peter Altmaier (CDU), his counterparts from North Rhine-Westphalia, Rhineland-Palatinate and Schleswig-Holstein also warned of too much bureaucracy and delays in paying subsidies. The Federal Ministry of Economy reacted coldly on Monday: states participated in the deliberations from the beginning. The November aid is a federal program, funded with federal funds. This can be translated with the message: Who pays, decides. What is it about:
OBJECTIVE OF NOVEMBER AID
The November aid is granted mainly to companies that have had to close due to official orders, that is to say, that are directly affected. These are pubs and restaurants, leisure and cultural facilities, as well as hotels that are no longer allowed to accept tourists and freelancers such as artists who can no longer find work. Grants worth 75 percent of average turnover will be awarded in November 2019. For the self-employed (sole proprietorships without employees, such as artists) and young businesses, there are exceptions to comparative values.
DISPUTE ABOUT THOSE INDIRECTLY AFFECTED
The main controversy concerns companies that are indirectly affected, that is, they did not have to close, but whose businesses continue to seriously suffer from partial closure. However, according to federal requirements, they must “verifiably and regularly” generate 80 percent of their sales with companies directly affected by the closures. The Federal Ministry of Economy and Finance named as an example a laundry that works mainly for hotels.
This is where criticism from the federal states begins. In places where there are even more tourists than locals in the pedestrian zones, even in the off-season, retailers are also indirectly affected by closed hotels, according to the letter to Altmaier. Many indirectly affected companies also made less than 80 percent of their sales with companies that had to close, but with end customers, such as clothing stores in spas, that now have no customers.
The German Retailers Association (HDE) also sounded the alarm on Monday: inner-city retailers had recorded a massive drop in customer numbers and significantly lower sales in the first week of November. “With its blackout light, the federal government has created a situation where downtown retail is financially starved with open doors,” criticized HDE Managing Director Stefan Genth. Retailers should also be included in the emergency assistance program. The taxi industry and the travel industry had also complained that many businesses fell due to the November aid package.
State ministers have now proposed a different calculation: “Practical and fair” would be to measure aid solely on the basis of significantly lower sales in November, for example, 80 percent. That would significantly increase the pool of indirectly affected companies that would receive state aid, and the federal government would likely have to increase the package financially.
WHEN HELP SHOULD ARRIVE
The dispute between the federal government and the states could delay aid. Altmaier had announced that advance payments should be made as soon as possible, ideally by the end of November. The Ministry of Economy is currently working on programming the existing IT platform for bridging aid for November aid.
As with bridging assistance, applications must be submitted by a tax advisor or auditor to avoid misuse. There should be an exception for the self-employed who do not apply for funding greater than 5000 euros: they should be able to submit applications directly.
But this threatens to overwhelm the states, as the letter from Minister Bernd Buchholz (Schleswig-Holstein / FDP), Volker Wissing (Rhineland-Palatinate / FDP) and Andreas Pinkwart (NRW / FDP) shows. Direct submission of applications by freelancers should absolutely be avoided, he says: “After our experience with tens of thousands of massive applications, we know that this point paralyzes the entire process.” The Federal Ministry of Economy, on the other hand, asked the states to verify whether more personnel could be deployed in the responsible authorities.
The German Hotel and Restaurant Association made it clear that time was short. November’s aid should arrive quickly and without bureaucracy: »Our companies are with their backs to the wall. Every day counts. “