Corona used up reserves
The Federal Employment Agency complains that the cash register is empty
1/22/2022 3:01 p.m
The Corona crisis is taking a toll on the Federal Employment Agency’s financial cushion. The authority has had to spend a total of 52 billion euros so far. Above all, the short-time allowance has cushioned a lot, but is actually not the right instrument, explains the BA finance director.
According to CFO Christiane Schönefeld, the Federal Employment Agency will need a long time to build up a reserve to fight off the crisis after the Corona years. “It will be years before we have a secure and crisis-proof financial cushion again,” said Schönefeld. There is still a gap of 1.3 billion euros in the 2022 budget. Money can be saved again from 2023 at the earliest, said Schönefeld, who will retire as a board member of the federal agency after more than 35 years in the agency in the second half of the year.
After two budgets in 2020 and 2021 with extreme spending of 61 and 58 billion euros, Schönefeld is hoping for improvement in the current year. “We are moving towards normality,” she said. Expenditure of 38 billion euros is planned. “We can be optimistic that we are not entirely wrong,” she said.
According to previous calculations, the Corona crisis has cost the Federal Agency around 52 billion euros. For comparison: the financial crisis of 2008 and 2009 devoured 19 billion euros from the coffers of the Nuremberg authorities. In the current crisis, the means of short-time work were used much more than then – on the one hand because the instrument was made more attractive through higher rates and the assumption of social security contributions, on the other hand because employers wanted to keep their staff in times of a shortage of skilled workers.
Short-time work not intended for pandemics
The social security contributions for short-time workers alone would have almost completely eaten up the Federal Agency’s reserves of almost 26 billion euros, which seemed immense at the time. “We fought hard for the reserve, but lost it again quickly,” said Schönefeld. “We were able to absorb a lot as a result.”
In the current year, the Federal Agency has based its calculations on an annual average of around 300,000 short-time workers. If it were more, it would have to be recalculated. In addition to the payments for short-time work, there are considerable additional personnel expenses from the Federal Agency for processing. “For possible future pandemics, you have to consider whether short-time work is the right way,” said Schönefeld. The instrument, with its enormous amount of work for both employers and the authorities, was not developed for widespread pandemic cases, but for isolated economic dips.