German parliamentary coalition agreed to allocate another 10 billion euros to help the economy

German parliamentary coalition agreed to allocate another 10 billion euros to help the economy

German economy recovers from devastating effects of coronavirus pandemic.

German parliamentary coalition agreed to allocate another 10 billion euros to help the economy

The parties of the German coalition agreed on Tuesday to expand measures to mitigate the effects of the coronavirus crisis on Europe’s largest economy. For these purposes, 10 billion euros will be allocated. Proposed measures include extending shorter working hours and freezing company bankruptcy rules..

In the second quarter, the German economy contracted at the fastest rate in its history. The government is desperate to mitigate the impact of the pandemic as much as possible, especially ahead of the fall 2021 elections.

German parliamentary coalition agreed to allocate another 10 billion euros to help the economy

«Coronavirus remains a reality and a problem», – stated Annegret Kramp-Karrenbauer, leader of the Conservative Christian Democrats (CDU) after seven hours of negotiations with their center-left coalition partners Social Democrats (SPD).

«We agreed today that we will expand important and effective measures on how we will fight the coronavirus», – she added.

Key decisions included extending the short-term employment subsidy, which expired in March 2021, until the end of next year, and extending the interim assistance for small and medium-sized companies until the end of this year..

Short-term employment saves jobs by allowing employers to cut employees’ hours while keeping them employed.

Minister of Finance Olaf Scholz, a social democrat, said in an interview with the state broadcaster ZDF that next year such measures could cost the budget up to 10 billion euros.

«The goal now is to stabilize the economy, ”Scholz said. – The fact that we acted quickly and on a large scale led to the fact that Germany weathered the crisis much better than other (countries)».

The parties also agreed to extend bankruptcy prevention measures by allowing firms facing financial difficulties due to the pandemic to postpone filing for insolvency until the end of the year..

German Chancellor’s Government Angela Merkel also tabled a large stimulus package worth more than € 130 billion that it hopes will help the economy return to growth.

Coalition parties also agreed on electoral reform aimed at reducing the number of deputies in the lower house of parliament of the Bundestag.

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