The ruling coalition has agreed to prolong work subsidies and continue substantial financial help to small and medium-sized companies. The move followed the announcement on Tuesday, August 25, of a 9.7 percent fall in GDP in the second quarter, when the coronavirus crisis was at its worst.

Short-time work subsidies had been due to end in March next year, but have been extended by nine months. Under the scheme, employers keep on staff but in a shorter working week. Kurzarbeit has been considered a success in cushioning the worst effects of the crisis.

The direct aid to business programme has been extended until the end of this year from its original end date of August 31.

The likely cost of the state help will be up to 10 billion euros, according to Finance Minister Olaf Scholz.

PHOTO: Scholtz Reuters