Lambrecht wants a voucher solution for corona cancellations that complies with European law

Berlin Despite the opposition from the EU Commission, the German government wants to maintain a voucher solution for canceled trips in the corona crisis. “The Federal Ministry of Justice and Consumer Protection has taken note of the Commission’s first assessment of the proposed voucher solution,” said a spokesman for department head Christine Lambrecht (SPD) the Handelsblatt.

“At the European level, the Federal Government will continue to point out the need for action for a uniform and practical solution and will work for a voucher solution that complies with European law, which in the current situation also takes due account of the interests of consumers.”

Because of the coronavirus crisis and the travel restrictions imposed, it would be important for many travel providers to now be able to issue vouchers for unusual vacations, instead of having to reimburse money. This would save their liquidity. The federal government has so far advocated a mandatory voucher solution. EU Justice and Consumer Commissioner Didier Reynders rejects this.

“Member States have to make sure that national decisions are in line with EU law – and that gives consumers the choice between vouchers and reimbursement of costs,” Reynders told the Frankfurter Allgemeine Zeitung.

There is some national discretion in the EU Package Travel Directive. However, the EU Commission alone is responsible for the regulation on passenger rights. Here, too, the federal government advocates that the airlines can hand over vouchers for canceled flights and should only refund the money for booked flights in exceptional cases.

Union wants travel industry bailout fund

In view of the EU reservations, Union politicians moved away from a voucher solution on Friday. “If European law leaves no scope for a mandatory voucher solution, we need other regulations,” said the legal policy spokesman for the Union parliamentary group, Jan-Marco Luczak (CDU), the Handelsblatt. “I can imagine a state-secured travel insurance fund from which the repayments will initially be financed.”

The CSU tourism politician Paul Lehrieder spoke of a “protective umbrella for the travel industry” that should be curious. “We are therefore considering setting up a travel rescue fund that protects travel companies from insolvency and at the same time guarantees consumers the reimbursement for their canceled trips.”

Lehrieder put the volume of the fund for trips booked until the end of summer at around ten billion euros. “The state would take over the full amount,” he said.

According to Luczak, the sum should not be imposed on the taxpayer. “That is why the travel industry has to gradually replenish this fund so that the money can flow back to the federal budget.” About one percent of each newly booked package tour can be paid into this fund by the tour operators.

The German Travel Association (DRV) did not want to comment on the plans of the Union politicians, but emphasized that because of the resistance in Brussels, the federal government must now immediately pass a national regulation.

“According to the DRV, this is legally possible without violating EU law,” said the lobby association of travel agencies and tour operators. DRV President Norbert Fiebig called for “direct, non-repayable grants to travel agencies and tour operators to be applied for with no red tape.”

According to the DRV, the travel industry in Germany has to cope with a revenue loss of 4.8 billion euros from mid-March to the end of April alone. 3.5 billion euros are currently flowing out of companies for customer repayments at short notice. “This leads to an unacceptable economic imbalance,” warned Fiebig. “If tour operators slip into bankruptcy in large numbers, vacationers will lose a lot of money.”

More: Read here what consumer advocates think about the voucher solution for canceled trips.


Brussels rejects federal government plans for travel vouchers

Berlin EU Justice Commissioner Didier Reynders rejects vouchers for canceled trips in the corona crisis. He has now given a clear rejection of the corresponding plans of the federal government. “Member States have to ensure that national decisions are in line with EU law – and that gives consumers the choice between vouchers and reimbursement” Reynders told the “Frankfurter Allgemeine Zeitung”.

The EU Package Travel Directive requires repayments to be made within 14 days. According to the will of the federal government, consumers should receive vouchers instead of an immediate repayment when the trip is canceled. The vouchers are to be limited until the end of 2021. If the customer has not redeemed his voucher by then, the organizer must refund the value.

Justice Minister Christine Lambrecht, Minister of Economic Affairs Peter Altmaier (CDU) and Minister of Finance Olaf Scholz (SPD) had already written to Reynders because a voucher solution would have to be approved by the EU Commission. Several other countries also wanted to contact the Commission.

Altmaier had spoken on Thursday to talks with the EU Commission about a uniform regulation for Europe. The reason: For many travel providers, it would be important to be able to issue vouchers now instead of having to refund the money because of the current crisis and the travel restrictions imposed. In this way, their liquidity can be secured in the crisis, Altmaier told the “Bild” newspaper. For customers who are acutely dependent on repayments, there will be a hardship regulation.

Didier Reynders

The EU Justice Commissioner rejects compulsory vouchers.

(Photo: dapd)

The President of the German Travel Association (DRV), Norbert Fiebig, had recently described the situation of companies in the travel industry as “more than just a threat”. According to the DRV, the travel industry in Germany has to cope with a drop in sales of 4.8 billion euros from mid-March to the end of April alone. 3.5 billion euros are currently flowing out of companies for customer repayments at short notice.

Encouragement instead of commitment

“This leads to an unacceptable economic imbalance,” warned Fiebig. “If Brussels continues to hesitate, the German government will have to take action again and take steps to protect the travel industry very quickly at the national level,” said the DRV President. “If tour operators slip into bankruptcy in large numbers, vacationers will lose a lot of money.”

EU Commissioner Reynders advocated “pragmatic and attractive solutions for companies and consumers”. However, this could only be to encourage consumers to accept vouchers, not to oblige them to do so. Vouchers accepted voluntarily should also be refundable if they were not used and insured against the insolvency of the provider.

The federal government had asked the EU Commission for an exemption from the crisis, since the obligation to reimburse also leads to high cash outflows for airlines because of the almost total collapse in passenger air traffic. To this end, the EU government has presented a detailed proposal with deadlines and hardship regulations. To do this, the EU regulation on passenger rights would have to be changed.

However, the Commission does not want to know anything about a derogation. The FAZ quoted a spokesman for the authority, saying that the legal requirements also apply in unavoidable and extraordinary circumstances, such as those that exist in a pandemic.

More: Read here what consumer advocates think about the voucher solution for canceled trips.


EU government leaders agree on billions in aid

This should make it clear that aid will be available to the countries hit particularly hard by the pandemic, even if the heads of government have not yet agreed on the details.

It was the fourth video conference of the bosses since the pandemic broke out in Europe. And one gets the impression that after a phase of irritation and aggression, the 27 EU countries are now slowly realizing that they have to approach each other. “It was a very good atmosphere, supported by the awareness that we have to decide unanimously,” said Chancellor Angela Merkel after the conference. It was a “very, very friendly conversation”.

The feared clash between Northern and Southern Europe, between the Netherlands and Italy did not occur at this meeting. The new peacefulness may have to do with the seriousness of the situation.

At worst, the European economy will collapse by 15 percent this year, warned ECB chief Christine Lagarde, who also participated in the video switch. The EU can only avoid the worst if it pulls together. This finding has evidently become established in government headquarters.

The Chancellor made a significant contribution to this by pledging to help the Southern Europeans – and not just with alms. “Everyone agreed that it is now not about 50 billion,” said Merkel. And she assured that Germany was ready to make higher contributions to the EU budget. Merkel continues to categorically reject only one thing: euro bonds. “It is not possible to communitize debts.”

However, this does not mean that European bonds are generally excluded. On the one hand, such bonds already exist: the ESM euro bailout fund is issuing them, and the EU Commission has already received approval to do so in the future. For the European short-time work allowance “Sure”, it can raise up to 100 billion euros on the capital market.

EU summit

Video link of the European heads of state and government.

(Photo: AP)

It will not stop there. The Commission also intends to finance the planned reconstruction plan with European bonds. A Commission working paper speaks of a volume of EUR 323 billion.

The EU Commission is expected to present its draft reconstruction plan in May. It will be embedded in the next Multiannual Financial Framework (MFF) for 2021-2027. The Commission had already presented a draft for this MFF in 2018.

Now she wants to present a significantly increased “MFR Plus”. The Member States should pay higher contributions to this “MFF Plus” than previously planned. Added to this is the money raised on the capital market – at least 300 billion euros. In total, the MFF could swell to 1.5 trillion or even two trillion euros, is speculated in Brussels. For comparison: the MFF still running for the years 2014 to 2020 comprised a volume of almost one trillion euros.

The new figures are huge and the EU Commission has to give them good reasons. The authority must determine the needs precisely, said EU Council President Charles Michel. The “order of magnitude” must “be underpinned why this is so,” said Merkel.

Who is liable in the end?

The direction is clear: there will be a reconstruction program within the EU budget. But there will probably still be hard arguments about the essential building blocks. For example, the question of how the money is used is controversial.

Should the recipient countries receive grants or only repayable loans? The Northern Europeans are for the first, the Southern Europeans for the second. And Germany sits between all the chairs. The Federal Government can clearly imagine that at least part of the reconstruction fund will be passed on as transfers to the countries that have been particularly hard hit by the crisis.

It is also questionable which economic sectors will receive money from the reconstruction plan. The Commission should also make proposals for this. Finally, it is unclear who is liable for the debts incurred for the reconstruction.

The EU Commission wants to use the European budget as a guarantee – and therefore increase the so-called own resources ceiling – currently 1.2 percent of the EU’s gross domestic product – at least temporarily to 1.7 percent of GDP. This means that Member States’ liability for the European budget increases accordingly. Especially in the group of the so-called “economical four” – the Netherlands, Finland, Austria and Sweden – this should not necessarily meet with love.

The summit decisions at a glance:

  • An aid package for short-time workers, companies and indebted countries that has already been negotiated by the finance ministers has now been approved by the heads of state and government.
  • Merkel and her colleagues welcomed the exit strategy from the corona restrictions, which was presented last week and is intended to ensure joint action by the 27 states. The paper specifies three essential prerequisites for easing: a noticeable slowdown in the spread of the virus, enough hospital and intensive care beds and the possibility of effectively monitoring the spread of the virus.
  • EU Council leader Charles Michel’s “roadmap for recovery” was also adopted. The Belgian calls for reforms for a stronger and more powerful EU after the corona crisis.
  • Work on a development fund to cope with the Corona economic crisis has not yet been completed. The EU summit commissioned the EU Commission to develop a detailed plan.

More: These are the ideas for financing the EU reconstruction fund


Current economy: Corona aid package approved – Economy

Here you will find the latest business news in chronological order, with the latest news coming first.

Thursday, April 23, 7.20 p.m .: The EU summit approved the agreed loan support package of up to 540 billion euros for short-time workers, companies and indebted countries. The Italian Prime Minister Giuseppe Conte, who recently had reservations about aid from the ESM euro rescue fund, is now also supporting the package. The aid should be ready by June 1st. The EU finance ministers agreed on the package two weeks ago. It contains three points – a “safety net” for jobs, for small and medium-sized companies and for troubled countries like Italy or Spain, which are in debt anyway and are now hard hit by the Corona pandemic.

The second point is a guarantee fund at the European Investment Bank (EIB), which the EU countries are also to provide with 25 billion euros. The third element is precautionary credit lines from the European Stability Mechanism ESM. In contrast to ESM aid during the euro crisis, no savings programs are required for this “pandemic crisis aid”, there is only one requirement: The money can only be used for direct or indirect health costs. dpa

Monday, April 6, 7 a.m .: The answer to no to corona bonds remains: the two SPD ministers Olaf Scholz (finance) and Heiko Maas (exterior) confirm their negative attitude in a joint guest contribution for several European newspapers. They repeat that the ESM euro bailout and the European Investment Bank EIB should be used instead. Italy, Spain and France in particular are demanding corona bonds, i.e. joint bonds. The euro finance ministers are discussing possible instruments this Tuesday. This article explains the differences between corona bonds, ESM and EIB.

Sunday, April 5, 8 a.m .: Despite all the aid measures, Europe has to spend more money in the aftermath of the Corona crisis. For this reason, EU Commission President Ursula von der Leyen spoke out in favor of massive investments in the EU budget. “We need a Marshall Plan for Europe,” she wrote in a guest post for the Welt am Sonntag. The EU budget was accepted in all member states as an instrument of solidarity-based compensation and had to be adjusted accordingly to the crisis. The Marshall Plan was a multi-billion dollar aid program from the United States that got Western Europe drawn from World War II back on its feet.

Von der Leyen was confident that Europe would recover soon: “The many billions that have to be invested today to avert a major catastrophe will tie up generations.” In this way, the feeling of community among the nations of Europe could be renewed even in the crisis. The former foreign ministers Joschka Fischer (Greens) and Sigmar Gabriel (SPD) also spoke in favor of a Marshall Plan, albeit in support of Spain and Italy to prevent a possible breakup of Europe. “Europe now needs two things: joint aid in the crisis and a joint recovery program after the crisis,” Fischer and Gabriel write in a guest post for the Handelsblatt and the Daily mirror (Monday).

“Italy and Spain will not forget Europe and especially we Germans for a hundred years if we let them down (…) now. And that is exactly what we are doing,” criticize the two former ministers. In their view, the corona virus has the potential to deepen the cracks that already exist in Europe so massively “that the Union could break apart”. In Italy in particular, there has been repeated criticism of inadequate aid from the EU.

The EU threatens to fail dramatically in this biggest test since its creation, Gabriel and Fischer said. “Instead, we are seeing that powers like Russia and China provide effective public aid to emphasize precisely this deficit in Europe. It is obvious that humanitarian and political goals are being pursued at least at the same time.” The German export ban on medical aids has been lifted and Germany is one of the countries that offer hospital beds to seriously ill patients from Italy, France and Spain. But at best this is a “drop in the bucket”. dpa

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Saturday, April 4, 8:40 a.m .: Greens chairwoman Annalena Baerbock accuses Federal Minister of Economics Peter Altmaier (CDU) of not pushing ahead with the production of important medical devices in the corona crisis. “Germany, in cooperation with our European neighbors, could quickly start a pandemic economy because so many companies have their guns at their feet,” said the dpa party leader. “It would actually be the job of the Federal Minister of Economics to gather the players together, to support their initiative and to ensure investment security for the future with acceptance guarantees.” But Altmaier “apparently doesn’t happen at all,” criticized Baerbock. “The task now is to create the conditions for steps out of the shutdown in a joint effort.” This would require more production capacities for masks, ventilators and protective clothing. “The Ministry of Economy and Health should work together with the federal states to ensure more production capacity and coordinated procurement in a task force.” dpa

Friday, April 3, 6:15 p.m .: The EU Commission has cleared the way for relief in the Loan program the federal government in the corona crisis. The Commission approved programs on Friday where Member States could, for example, grant interest-free loans or assume 100% risk liability. The maximum limit per company is 800,000 euros. The aim was to quickly meet the urgent liquidity needs of small and medium-sized companies, the commission said on Friday. dpa

Friday, April 3, 4:36 p.m .: Because many SMEs despite the federal government’s aid programs, the Ministry of Economic Affairs now wants to add more money. “We are working flat out to improve credit instruments,” the ministry said. The federal government had originally agreed to assume 90 percent of the risks if medium-sized companies with eleven to 249 employees needed additional liquidity. The respective ten banks should assume the remaining ten percent of the credit risk. This should prevent abuse, the EU Commission approved the program under this condition. In some cases, however, banks themselves were still too high in this risk. One is now talking to Brussels about improvements in terms and the release from liability, the Ministry said. Both require an approval under state aid law. Michael Bauchmüller

Friday, April 3, 3:40 p.m .: The EU Commission wants Import duties on medical devices suspend. That said Commission President Ursula von der Leyen on Friday in a video message. This affects the import of certain medical devices and devices from outside the EU. Some such products are not, or only to a very small extent, subject to import duties. Von der Leyen cites breathing masks from China as an example, which would currently be subject to twelve percent import duties. The measure should initially apply for four months. vd

Friday, April 3, 1:28 p.m .: The US President’s family business Donald Trump is in informal talks with Deutsche Bank about postponing some loan payments, a person familiar with the matter said. The global corona virus pandemic has forced borrowers and lenders to discuss debt settlement options in the face of currently enormous pressure on corporate results. The talks were previously held by the New York Times reported. A Deutsche Bank spokesman declined to comment. A Trump Organization spokeswoman did not immediately respond to a request for comment.

Relations between Germany’s largest bank and Trump have been under review since the former real estate tycoon became the leading candidate for the US presidency four years ago. The leadership of Deutsche Bank was so concerned about the potential impact on the image at the end of 2016, should the Trump organization fail to service around $ 340 million in loans, that it would extend the repayment dates until after the end of a possible second term in 2025 discussed, reported Bloomberg. She ultimately decided against the idea and just decided not to do any new business with Trump during his tenure. The Trump Organization has also spoken to Palm Beach County, Florida about leasing payments for a golf course the company operates, the said New York Times in the report, citing unnamed individuals familiar with the matter. Bloomberg

Friday, April 3, 7:03 a.m .: Mexico will not be one for the time being Corona Bier brew more. The government does not consider the continued operation of the brewery to be urgent, reports the parent company Grupo Modelo. Production is currently being shut down and stopped on Sunday until further notice. Should the government beer but still classified as an agro-industrial product could be brewed further. The production of agricultural and food products is in Mexico despite that coronaCrisis allowed.

Friday, April 3, 1.20 a.m .: Federal Minister of Labor Hubertus Heil is ready to talk about an increase in short-time work benefits if companies are otherwise in need of existence in the virus crisis. “My appeal to employers in this situation is clear: don’t throw people out! You have the easier rules for short-time work with which we build bridges over this crisis. If necessary, we build them even longer”, the SPD politician said Rheinische Post. There are already many collective bargaining or company agreements to increase short-time work benefits from 60 or 67 percent (for employees with children) to 80, 90 or 100 percent of wages. “But there are also industries in which this is difficult or controversial.” The state also assumes 100 percent of the social security contributions for short-time workers.

He would talk to employers and unions about how they could pass this advantage on to employees, “but also about whether we could raise the short-time allowance again,” said Heil. The main thing is to protect those who already have low wages from unreasonable wage losses. dpa

Thursday, April 2, 8:52 p.m .: The sporting goods manufacturer Adidas, which was hit hard by the Corona crisis, needs fresh liquidity. Adidas will need credit, but no direct state aid, a spokeswoman said. She did not want to disclose the amount of the loans. The company had announced two days ago that, given the high level of economic uncertainty surrounding the Corona virus outbreak, “it was proactively taking a conservative approach to liquidity management to maintain the company’s financial flexibility in the current environment.” In the process, Adidas also stopped its planned share buyback program.

Adidas had hit the headlines this week for announcing that it would not pay its rent for temporarily closed stores. The sports merchant had justified this with enormous sales losses. After many negative public reactions, Adidas apologized and declared that it should now pay the rents. dpa

Thursday, April 2, 8 p.m .: The electric car manufacturer E. Go Mobile is running out of money. The company of the Aachen professor Günther Schuh has applied for a protective shield procedure. The district court of Aachen granted that, E. Go announced on Thursday evening. Protective shield procedures are intended to protect companies at risk of bankruptcy for three months before their creditors have access.

The corona pandemic interrupted the sale of cars and supply chains, E. Go said, and the capital market had also broken down. So far, investors such as the supplier ZF had supported the company founded in 2015. “Now they understandably have other priorities,” said Schuh. E.Go has no state bailout program: this requires banks to take over their own share; there was no bank ready for this at E.Go.

The company produces small electric cars in Aachen with entry prices of just under 18,000 euros. However, Schuh’s ambitious goals for the year had stalled before the epidemic broke out. E.Go reported component issues in 2017; In 2018, some suppliers terminated supply contracts. Benedikt Müller

Thursday, April 2, 2:30 p.m .: In the Corona Virus Crisis, unemployment claims in the US skyrocket. Last week, 6.65 million Americans made an initial application, the Department of Labor said in Washington on Thursday. With just under 3.3 million applications, the number of first applications in the previous week had already been the highest level since the collection of data, and now there is a new record.

Analysts interviewed by Reuters had only expected 3.5 million applications. Many economists assume that the unemployment rate of 3.5 percent will skyrocket in the wake of the wave of redundancies triggered by the virus pandemic: leading monetary authorities of the Federal Reserve expect an increase to double-digit figures.

The initial applications are an indicator of the short-term development of the labor market in the world’s largest economy. They now point to a dramatic economic downturn as a result of the Corona crisis. Up until a few weeks ago, the number of initial applications had regularly been below 100,000 per week. The full extent of the economic upheaval of the coronavirus pandemic is still not foreseeable. However, many analysts now fear a dramatic slump in the second quarter and a recession all year round.

The rapid spread of the novel coronavirus Sars-CoV-2 has brought public life to a standstill in large parts of the USA. Around three quarters of the approximately 330 million Americans are now subject to exit restrictions imposed by states. Many shops are closed, restaurants and hotels remain empty, countless trips have been canceled. Many employees of closed companies therefore have to apply for unemployment benefits. Layoffs are generally much faster in the United States than in Germany, for example. Until now, there was no regulation in the USA like short-time work benefits to stabilize those in crisis situations.

With an economic stimulus package that the US Congress plans to use to pump around $ 2 trillion into the economy, unemployment benefits, which were previously very limited, were expanded last week. Employers should now also be able to leave employees on leave for up to four months instead of firing them. During this time, the state would pay for the salary. However, the new regulation had hardly any effects on the most recent first applications up to last Friday. Reuters, dpa

Thursday, April 2, 12.45 p.m .: Together with the SPD co-boss Norbert Walter-Borjans reports Federal Minister of Finance Olaf Scholz (SPD) from first experiences with the protective shield for employees and business. Scholz draws a positive interim assessment of the government’s aid packages. So far, around nine billion euros in aid have been applied for. Around 1,500 of 1,800 applications have already been approved. “We hope that everyone will not run out of breath.” The situation is difficult, but Germany has put together one of the largest packages of measures worldwide. This makes a supplementary budget of 156 billion euros necessary.

Thursday, April 2, 12.06 p.m .: EU Commission President Ursula von der Leyen presents its plan to support short-time workers in the European Union. The “Sure” initiative is intended to benefit countries particularly affected by the Corona crisis, such as Italy and Spain. Loans are planned to be financed with the help of guarantees from all Member States. A sum of up to 100 billion euros is to be secured by guarantees of 25 billion euros from the member states.

She had previously admitted mistakes by the European Union in dealing with Italy in the Corona crisis and in a contribution for the Italian newspaper La Repubblica wrote: “The Union will provide up to a hundred billion euros in aid to the hardest hit countries, starting with Italy, to offset the reduction in short-time workers’ wages.”

Italy reported more deaths than any other country in the crisis, followed by Spain. The economic damage caused by the strict curfews is enormous. “It must be recognized that in the early days of the crisis, given the need for a common European response, too many thought only of their own problems,” wrote von der Leyen. “It was harmful behavior that could have been avoided.” Meanwhile, Europe has changed the pace. “We have done everything possible to get European countries to act like a team and ensure a coordinated response to a common problem.” dpa

Thursday, April 2, 10:25 a.m .: The Federal Government’s measures to rescue companies in the Corona crisis already correspond to a quarter of the annual economic output, reports Günther Bräunig, head of the state KfW bank. On behalf of the federal government, the financial institution is responsible, for example, for loan applications from companies that ask for support. “Germany is in full swing,” says Bräunig. For comparison: In China it has been four percent of economic output so far, in the United States ten percent. The corona crisis affects the economy much more than the 2008 financial crisis. “Every company is affected.” KfW has therefore continuously improved the conditions of the program. In many cases, the house banks of the applicant companies are hardly at risk: KfW is liable for up to 90 percent of the loan. Already there are 2500 applications for aid with a volume of almost eleven billion euros – 2000 of which with a volume of 750 million euros have already been committed. The number of people looking for help is likely to increase significantly: “We expect the numbers to rise sharply from Monday onwards because on Monday IT will be ready to make it possible to immediately request and access money digitally,” says Bräunig. Around 4,000 calls were received in the KfW information center every day. However, the institute does not dare to forecast the credit volume that can still be expected: the large numbers would come from the large companies that were looking for help. One thing is already known: Tui. jawi / mesc

Thursday, April 2, 0.59 a.m .: The fast-casual restaurant chain Vapiano SE applies to the competent district court in Cologne to open insolvency proceedings due to insolvency. At the same time, it will be checked whether bankruptcy applications have to be made for subsidiaries of the Vapiano Group, CFO Lutz Scharpe said. Due to the corona crisis, the ailing group’s liquidity requirements had increased significantly. The company states that, due to a lack of agreement on a financing solution with banks and major shareholders, the prospect of funding from the state aid package Covid 19 could not be applied for. All restaurants operated by Vapiano SE remained closed until further notice due to the current corona pandemic. German and international franchisees are not directly affected by the bankruptcy of Vapiano SE, said the system restaurant operator.


Corona: Banks want looser rules for state aid – economy

The EU Commission could exploit the legal leeway very flexibly to hold taxpayers liable again in an emergency.

It is becoming apparent that the great promise made by the governments from the financial crisis that they will never again bank banks clinging to taxpayers’ money could not be kept in the corona crisis. According to the Süddeutsche Zeitung Individual financial institutions, but also governments, are urging to loosen the strict conditions for government aid as a precautionary measure and at the same time to soften the directive on winding down clumsy banks.

If they were successful with this, taxpayers would have to assume the losses from banking business again. As early as March, when the corona virus was spreading almost unchecked in Europe, the EU Commission had announced that it was examining “whether it will be necessary to make the rules for state financial injections more flexible for banks”. This test is reported to be in full swing. In essence, the EU state aid law should serve as a door opener, where the EU Commission has great discretion.

“Under no circumstances should there be a blank check for state aid to the banks, nor does the state aid law give it away at all,” says Sven Giegold, MEP of the Greens. It cannot be ruled out that in the event of a worsening of the corona crisis, a state would also have to help banks in individual cases. “But that always has to be checked specifically.” Banks in Italy and Greece in particular are considered to be extremely vulnerable to crises. To this day, their balance sheets contain bad loans in the billions, which date back to before the financial crisis. Most recently, the ECB therefore discussed the establishment of a bad bank where these contaminated sites could be disposed of.

Further government aid to banks would break the political promise of the 2008/2009 financial crisis. In Germany, the rescue of German banks at the time has cost taxpayers around 68 billion euros. This includes sufficient guarantees, loans and capital injections. Chancellor Angela Merkel (CDU) had promised at the time that it should never repeat that losses from banking transactions had to be socialized. On request, the European Commission and the federal government announced on Wednesday that they were opposed to a change in the rules that had been adopted at the time for the resolution of tight banks.

“The Federal Ministry of Finance is strictly against the softening of the directive,” said a spokesman for Federal Minister of Finance Olaf Scholz (SPD). The European Commission also said that it had “no intention” of touching the rules on bank resolution. The banks are in much better shape today than they were then and have “sufficient liquidity buffers,” said a spokesman for the authority. Nevertheless, he conceded that the corona crisis could hit the banks “indirectly”.

Corona virus updates – twice a day via email or push message

All reports on the current situation in Germany and worldwide as well as the most important news of the day – twice a day with SZ Espresso. Our Newsletter brings you up to date in the morning and evening. Free registration: In our News app (download here) you can also use the espresso or breaking news Subscribe as a push message.

In Germany, too, there are fears that the foreseeable wave of bankruptcies among companies, but also the failure of home loans, could put many banks in trouble in the medium term. The concerns of the banks about large-scale loan defaults go so far that the financial institutions had refused to take on only a small part of the default liability for certain companies in the state-secured KfW loans. The state stepped in because they refused. In these cases, German taxpayers are now fully liable if house banks pass on loans from the KfW state development bank to their customers. It is piquant that the house banks collect three percent interest from the needy companies that want to save themselves from bankruptcy with the quick loans.

At the same time, the federal, state and local governments are busy supporting domestic banks. It was only in 2019 that the Federal Ministry of Finance encouraged Deutsche Bank and Commerzbank to consider a merger. Both banks had tried for years to develop a viable business model. The balance of the financial crisis is “devastating”, according to the board of the “Citizens Movement Financial Turn”, Gerhard Schick. It is now visible how much the citizens were burdened. “A family of four paid more than 3000 euros for the bankrupt banks.”

Coronavirus: Your opinion on the loosening:Readers’ discussion


“Make sure that Europe doesn’t fly apart”

Brussels EU Commissioner Nicolas Schmit, responsible for jobs and social policy, is calling for more financial solidarity with EU countries like Italy, which have been hit hard by the corona crisis. “It cannot be that some countries come out of the recession somewhat unscathed and others get stuck in misery,” the Luxembourger warned in an interview with the Handelsblatt. “Otherwise the populists will get a boost again. We have to make sure that Europe doesn’t fly apart. ”

Countries such as Germany or the Netherlands would also be interested in this, Schmit emphasized: “Look at which countries export to where and where the surpluses arise”. Large investment projects are needed to find a way out of the crisis together. Schmit said that several countries were already interested in the EU loans to finance short-time work benefits (SURE) proposed by the Commission, and not just from southern Europe.

By the end of 2020 or early 2021, Schmit plans to submit proposals for European unemployment reinsurance: “It could amount to a fund that the states would then fall back on,” he said. In Germany, the CDU / CSU have so far strictly rejected the project. Schmit also wants to adhere to a European framework for national minimum wages: “We will certainly not get out of the recession and say that the social must be put behind the economic”.

Read the full interview here:

Commissioner, the pandemic is causing a deep recession. Will we see horrendous unemployment figures in Europe as we did during the financial crisis?
The European economy is at a standstill, which of course has consequences for the job market. In many countries, we have the option of cushioning this through short-time work. But the risk is very concrete that we will again get unemployment rates of more than ten percent in some countries. Young people in particular will be among the first victims because they are either looking for their first jobs or, as in Spain, are often in precarious employment. We must at least prevent them from falling into long-term unemployment again.

This cannot be prevented with short-time work benefits alone.
No, but it is an important way to dampen the explosion of unemployment. We have to secure an income for people and we have to keep companies alive.

The Commission has proposed reinsurance called SURE so that EU countries can finance the short-time working allowance paid through low-interest loans from the EU. When will the new funds be available?
I appeal to the finance ministers to adopt SURE in the next few weeks. We have millions of people in Europe who are on short-time work. That is why we need the instrument quickly to support the countries in the crisis. I also get requests from countries that want to use this tool.

Are these mainly southern European countries?
Not only. There are also countries in Central Europe that are interested, including large ones.

Do you mean Poland?
I will not give names.

How will the Commission grant the loans – and on what terms?
A government says how many people it has in its short-time working system, how many billions it costs, and how much it wants a loan for it. We then examine the application and, in coordination with the EU finance ministers, determine the amount, duration and interest rate. The exact amount depends on the conditions under which the Commission takes out the loans on the financial markets and then passes them on to the country. This cannot simply be written in a regulation.

The member states are to guarantee 25 percent of these loans. So do they have to step in if a country cannot repay the money?
I think that’s more hypothetical. If a member state does not repay this loan, it will also not pay many other loans – then we are in a completely different scenario.

However, some countries such as the Netherlands still object and insist that the SURE program be limited.
I hope that the instrument will be limited in time – if we are out of the crisis, we will no longer need short-time work to the same extent. The size of the pot is also limited to 100 billion euros. But it doesn’t make sense to set a limit of six months or one year in the regulation now – no one knows how long this recession will last. I think some countries fear that this crisis instrument will create a permanent system.

Permanent unemployment reinsurance is also part of the program of Commission President Ursula von der Leyen – even if there is much resistance to it in the European People’s Party. Should the current emergency program later be part of this permanent solution?
I do not believe that. There are already big differences between the SURE program and a permanent system, as suggested by Federal Finance Minister Olaf Scholz. The point is to stabilize a country that will be hit by an asymmetric shock – for example, by a crisis in a certain economic sector. Today, however, more or less all countries are in crisis.

What could unemployment reinsurance look like?
One thing is clear: there will be no European unemployment benefit paid out by the EU. Rather, the states should build up common reserves so that individual countries do not have to cut unemployment benefits massively during an economic shock. This is social, but it also makes sense as a macroeconomic stabilizer.

So it boils down to a fund solution like the one in the USA?
It could amount to a fund that the states would then use. This would also correspond to the suggestions of others, such as the German finance minister. But I don’t want to go into details right now because we focused on the SURE program. Hopefully we will present our proposals late this year or early next year.

Are you also sticking to the plans to introduce a European minimum wage framework?
We will certainly not get out of the recession and say that the social must be put behind the economic. This crisis shows how important investments in the social sector and in fair wages are.

Are you referring to the often poorly paid nurses or cashiers who keep the store going in the pandemic?
All countries should think about how big the wage gap should be. The Commission has no direct powers here, but we could comment on this in our general recommendations.

But will you propose a European legal framework for minimum wages?
We have not yet decided what form it will take. We will first consult the social partners again and then make suggestions.

So it has not yet been decided whether there should be a statutory lower wage limit, which is a certain percentage of the median income in the respective country, or whether it remains with a recommendation?
Various factors will have to be considered. If you take just one indicator, around 60 percent of median income, countries with very low wage structures would have no problem. So we have to bring together various indicators to achieve wage convergence in Europe. At present, the differences in wages are significantly larger than the differences in productivity.

French President Macron warns that without financial solidarity with countries like Italy, the EU will fail as a political project and populists will come to power. Would you agree with that?
We have to make sure that Europe doesn’t fly apart. It cannot be that some countries will come out of the recession somewhat unscathed and others will get stuck in misery. We will not find our way out of the crisis if everyone tries to play their own game. We depend too much on each other for that. There will be a lot of changes in the world too, so we need a strong European single market. It only works together, only in solidarity.

So you appeal to reserved states like the Netherlands or Germany to do more financial solidarity?
Solidarity is not a one-way street. Take a look at which countries export to where and where the surpluses arise. We need solidarity, of course not blindly and free of charge, and we need the major investment projects that the President of the Commission has mentioned. Otherwise the populists will get a boost again.
Commissioner, thank you very much for the interview.

More: The EU wants to strengthen the economy with a corona fund of up to 1.5 trillion euros. In an interview, EU Vice-President Dombrovskis explains how the Commission intends to finance it.


EU Commission presents corona exit strategy on Wednesday – Coronavirus –

Von der Leyen presents plan for exit from restrictions

Von der Leyen presents plan for exit from restrictions

EU Commission President Ursula von der Leyen will present the “Roadmap” with recommendations for EU countries for a gradual phase-out of the emergency measures against the coronavirus pandemic on Wednesday. That announced her spokesman Eric Mamer on Tuesday. Originally the plan should have been presented before Easter, but was postponed at the urging of some member countries.

The plan is intended to propose common criteria for the gradual lifting of the restrictions, but the decision and timing are up to the EU countries. Mamer emphasized that the “road map” was only a series of criteria and requirements that “we believe should apply to the evaluation and ultimately to the decision to relax measures”.

It was up to the EU member states to decide when to take restrictive measures and when to take them back. It was important to ensure that the countries would loosen the measures in an effective manner and take particular account of the situation of the other countries. The EU Commission would already discuss its recommendations with the member states this afternoon before they would be adopted tomorrow.

Von der Leyen was originally supposed to present the strategy last Wednesday. However, this was postponed at the urging of some member states so as not to send a signal of possible relaxation of the restrictions before Easter.

A draft strategy has already been published. As the newspaper “Die Welt” reported last week, the EU Commission proposed a gradual phase-out of the emergency measures with long intervals. The EU states should first lift the existing freedom-restricting measures at local level and then gradually expand the opening, according to the “exit strategy”.

Finally, the EU Commission is likely to have significantly weakened its own draft and chosen a more cautious approach, according to a report by “Politico” magazine on Tuesday. So the word “exit” was deleted and many scenarios were only described in the possible form.

Some countries have already taken steps to ease the situation, including Austria, Denmark and Spain. In Austria, in addition to the already open supermarkets, pharmacies and tobacco shops, other smaller shops as well as DIY and garden centers are now opening. Customers everywhere have to wear masks and adhere to the distance rules. In Denmark, kindergartens and elementary schools are due to reopen from Wednesday. In Spain, the first factories and construction companies were allowed to resume work on Monday. In Germany, Chancellor Angela Merkel and the heads of government of the federal states want to advise on Wednesday when and to what extent a gradual opening could begin. French President Emmanuel Macron extended the stringent exit restrictions in the fight against Covid-19 on Monday until May 11th.


Von der Leyen threatens criminal proceedings due to the Emergency Law

Ursula von der Leyen

The President of the European Commission is threatening Hungary with criminal proceedings.

(Photo: dpa)

Berlin, Brussels In view of the controversial Corona Emergency Act in Hungary, EU Commission President Ursula von der Leyen has threatened Budapest with criminal proceedings. “I am ready to act if the restrictions exceed the permitted level,” she said in the “Bild am Sonntag”. “Then there is a risk of infringement proceedings.” Other politicians have already called for concrete steps against Hungary.

Hungarian national leader Viktor Orban had been granted extensive powers of attorney by the Budapest parliament in late March to deal with the coronavirus pandemic. In this way, he can govern by ordinance without a time limit and possibly without parliamentary control. The emergency law had triggered criticism and concern at home and abroad.

Von Leyen emphasized that it was generally OK if EU countries responded to the crisis with emergency measures. “But: The measures must be proportionate, limited in time, democratically controlled.” The Commission is observing this in all countries, “but with Hungary we take a particularly close look because of critical past experiences”.

The CDU politician had already expressed similar views. Earlier this month, she said she was “particularly concerned about the situation in Hungary,” and said: If necessary, the EU Commission would act. The authority has not initiated any infringement proceedings since then. Such a procedure could result in an action before the European Court of Justice.

The SPD European politician Katarina Barley, on the other hand, has already called for concrete steps against Hungary and also against Poland because of their actions in the Corona crisis. “There is currently a great temptation for governments in some EU countries to gain unlimited powers under the guise of fighting pandemics,” said the Vice President of the European Parliament to the editorial network Germany (Saturday).

In the EU treaties, all countries committed to the rule of law, democracy and the separation of powers. Where national governments questioned this, the EU Commission had to act as guardian of the treaties and file a lawsuit with the ECJ, Barley demanded. She referred to Hungary, where Orban, under the pretext of combating corona, had indefinitely disempowered Parliament. In the case of Hungary, Barley had previously demanded that the EU Commission apply to the ECJ for an injunction.

In Poland, the ruling PiS party holds onto the presidential election in May with all its might, although a free and fair election campaign is impossible because of the pandemic. “It is crucial for the future of the EU that the fight against the pandemic is in line with the European values ​​of a liberal democracy.”

The conservative Seeheimer Kreis in the SPD demands in a position paper, which was available to the news portal, that the EU should cancel Hungary “in a first step” all EU money. “The governments in Poland and Hungary are making deliberate use of the corona crisis to further undermine democratic structures in their countries,” says the paper, as reported on Saturday. “Both countries are trampling on European values.” Poland must “immediately withdraw the” unconstitutional change “in its right to vote and return to the rule of law.”

It is not clear how Hungary is supposed to be painted. The EU states are currently negotiating a new budget framework for the years 2021 to 2027. Germany and other countries are pressing for future disbursements of EU funds to be linked to compliance with common values ​​such as the rule of law. Such a link to the financial framework would be new, but is controversial.

More: In an international emergency of all places, the European Union is losing its cohesion – even though the crisis has hit all member states hard. Germany must stand up to this.


The KfW rapid loan only starts after Easter

KfW in Frankfurt am Main

Aid must also be discussed with the federal government.

(Photo: dpa)

Frankfurt German small and medium-sized companies have to be patient a little bit before the Federal Government’s latest aid program starts. Because the KfW rapid loan, for which the state is fully liable, will only be available after Easter. “We are working flat out to make the KfW rapid loan available as quickly as possible, and we firmly assume that it will be that far in the week after Easter,” said Manuela Mohr, head of the online academy at KfW, in the expert call of the Handelsblatt on Wednesday afternoon.

Federal Finance Minister Olaf Scholz (SPD) had already announced the start of the program on Maundy Thursday. But that could not be implemented so quickly. “In addition to some technical points, other important details must also be coordinated with the EU Commission and the federal government,” explained Mohr.

The KfW Schnellkredit is aimed at small and medium-sized companies with more than ten employees, based on the information available to date. Companies with up to 50 employees should be able to receive up to 500,000 euros in credit, larger companies up to 800,000 euros. The state assumes full liability if a company cannot repay the loan.

A particularly important advantage of the loan is the maximum term: it should be ten years. With the previous special programs, companies should repay the loan within five years. In the opinion of many bankers, that would have overwhelmed many healthy companies.

According to a cabinet decision, the government also wants to extend the duration of KfW’s previous special programs, but that too has yet to be approved by the EU Commission.

14,000 credit inquiries from the German bank

Many companies are longing for the new funding instrument to help overcome liquidity shortages caused by the corona pandemic. Marcus Thiel, who heads Deutsche Bank’s promotional business, observes how big the interest of small and medium-sized companies is in the new funding instrument.

The interest of the companies has been enormous since March 13th: “In the first few weeks we received well over 50,000 inquiries related to corona. These are not always credit inquiries, but sometimes general issues such as short-time work, social security contributions or tax deferrals, ”he said in the expert call.

“In total, we received significantly more than 14,000 credit inquiries, although it was not always about promotional loans.” There are still other ways to provide customers with liquidity.

“Every fifth company in Germany could go bankrupt”

The new rapid credit should provide another boost. “Since the KfW rapid loan was announced, we have seen growing momentum again,” says Thiel. “We expect that there will be a very, very high demand as soon as this product is actually available.”

According to Mohr, there is no legal claim to promotional loans. “But we assume that the hurdles for approval from the house bank are low, since KfW assumes 100 percent of the credit risk,” she says. Nevertheless, the house bank is on board as part of the application and forwards the loan.

The details of the quick loan are not yet known because the federal government is still in coordination with the EU Commission, emphasizes funding expert Thiel. “But as long as the requirements are met, we see no reason why we should not apply for such loans for our customers.”

More on the subject:

Detailed information on Corona aid from the federal and state governments


Current economy: Beer tax is deferred – economy

No more football, no more festivals: Smaller breweries in particular fear for their existence in the Corona crisis. The financial authorities are now escaping them.

Here you will find the latest business news in chronological order, with the latest news coming first.

Monday, April 6, 9.43 a.m .: Bundestag President Wolfgang Schäuble (CDU) calls in the corona crisis to “think about new steps towards more solidarity and fiscal integration”. He writes that in a guest post with the President of the French National Assembly, Richard Ferrand. “We are convinced that this debate should be carried out and that our parliaments can do their part to clear up misunderstandings and make progress together,” they write. “Corona bonds” are not literally discussed in the article.

Monday, April 6, 7:12 a.m .: The deferral of the beer tax is said to Breweries in the Corona crisis provide better financial scope. The beer tax is due to the federal states and, according to the Federal Ministry of Finance, totaled around 650 million euros in 2019. The Federal Ministry of Finance and the state finance ministries have agreed that breweries can pay the tax later, said a spokesman for the Federal Ministry of Finance. This should “improve the liquidity of breweries and protect jobs in the current difficult situation”. It is generally not necessary to charge deferred interest. The deferral option flanked the other measures of the federal government, which should “preserve our social cohesion”.

The German Brewers Association called the deferral option an important signal for the industry, which is under great pressure. “It will now be important for the breweries to be able to use the deferral quickly and without red tape,” said managing director Holger Eichele. He emphasized that these were not grants. Many breweries have had their backs to the wall since export has largely ceased, events have been canceled and restaurants have had to close.

For the largest German private brewery Krombacher, the deferral of the beer tax is currently not an issue. “We will pay on time,” said a spokesman. Warsteiner says: “We are currently examining this possibility.” “It is not canceled, it is only delayed,” said a Veltins spokesman, which is why every brewery has to think about it carefully.

According to the latest Brauer-Bund survey on the effects of the corona crisis, 97 percent of companies expect sales to decline. Almost 80 percent would feel affected by cancellations or deferrals of rents and leases. 70 companies participated in the survey of breweries of all sizes. dpa

Monday, April 6, 7 a.m .: The answer to “no” to corona bonds remains: the two SPD ministers Olaf Scholz (finance) and Heiko Maas (exterior) confirm their negative attitude in a guest post for several European newspapers. They repeat that the ESM euro bailout and the European Investment Bank EIB should be used instead. “The funds must not be tied to unnecessary conditions that would mean a relapse into austerity policy after the financial crisis,” write the ministers. They also mention the “Sure” program proposed by the EU Commission, which, like in Germany, is intended to finance short-time work in the Member States. Italy, Spain and France in particular are demanding corona bonds, i.e. joint bonds. The euro finance ministers are discussing possible instruments this Tuesday. SZ

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Monday, April 6, 6:15 a.m .: Because of new political guidelines and the consequences of the corona crisis China deliver significantly smaller quantities to trading partners like Germany in the future. This is shown by an investigation by the German Raw Materials Agency (DERA). Beijing’s current strategy harbors the risk that “critical raw materials increasingly used for their own industrial production in order to be able to manufacture higher-quality products. “One possible consequence would be” an impairment of the raw material supply for German industries and more intense competition in the production of higher-quality materials and industrial goods “.

DERA is part of the Federal Institute for Geosciences and Natural Resources (BGR), which produces analyzes on security of supply on behalf of the Federal Ministry of Economics. According to the experts, China is the most important producer of 17 of the 27 raw materials that the EU classifies as “critical”. Other countries are also dependent on imports. “Delivery dependency poses a risk of supply shortages if unpredictable industrial policy measures or events such as the current Covid 19 pandemic occur,” it said. The Chinese leadership is considering a changed raw materials policy. In the case of mineral resources such as rare earths, magnesium or tungsten, our own needs are growing. According to DERA, the supply of raw materials, of which the country itself has to import a lot, is to be secured through further foreign investments. China is primarily active in Africa, where it competes with other countries. dpa

Monday, April 6, 2.36 p.m .: The production of the US aircraft manufacturer Boeing in the Seattle area will continue to stand still. Boeing announced in an email to its employees that the closure, initially scheduled for two weeks, which would have expired on Wednesday, will be extended indefinitely. Around 30,000 of Boeing’s nearly 70,000 employees in Washington State on the US west coast are affected. The basis for the decision was the health and safety of the employees, it said in the email. Follow the latest developments in the coronavirus pandemic and recommendations from the US authorities.

Boeing was hit hard by the Corona crisis, but could receive support from the government’s $ 2.2 trillion aid package. Among other things, the government was involved in Boeing. CEO David Calhoun also recently offered his employees the option of voluntarily resigning and receiving severance pay. But he also did not rule out unwanted layoffs in the future. AP

Sunday, April 5, 8 a.m .: Despite all the aid measures, Europe has to spend more money in the aftermath of the Corona crisis. For this reason, EU Commission President Ursula von der Leyen spoke out in favor of massive investments in the EU budget. “We need a Marshall Plan for Europe,” she wrote in a guest post for the Welt am Sonntag. The EU budget was accepted in all member states as an instrument of solidarity-based compensation and had to be adjusted accordingly to the crisis. The Marshall Plan was a multi-billion dollar aid program from the United States that got Western Europe drawn from World War II back on its feet.

Von der Leyen was confident that Europe would recover soon: “The many billions that have to be invested today to avert a major catastrophe will bind generations.” In this way, the feeling of community among the nations of Europe could be renewed even in the crisis.