Pyrotechnicians plunge into crisis: trade calls for further lockdown aid

Pyrotechnicians fall into crisis
Trade calls for further lockdown aid

Christmas is the most important time of the year for many retailers. But this year the lockdown threatens massive losses. Industry associations are therefore calling for further aid from the state. This is especially true for the pyrotechnic industry, which sees itself on the brink.

According to the industry association HDE, many retailers face the end of the new lockdown in the middle of the important Christmas business without government aid. After the decisions of the federal and state governments, the HDE criticized that the previously planned aid programs for retailers were inadequate. The federal government should "not leave the industry out in the rain": "The funds provided so far are nowhere near enough to prevent a wave of bankruptcies in the inner cities.

December is the month with the highest sales for retailers, and they usually make the lion's share of their profits around the holidays. With the closings outside of the grocery trade from Wednesday, the affected shops threatened a sales decline of 60 percent, it said. Compared to the previous year, around twelve billion euros in sales would be lost for dealers, the association calculated. The closings hit almost 200,000 retail companies. Up to 250,000 jobs are at risk.

The HDE is therefore calling for December to be treated equally with the catering industry and for the industry to be included in the December aid. From January a new form of financial aid for the retail sector will have to be found.

The federal government has already agreed to pay billions in compensation for the companies that are now additionally affected. Specifically, in the case of bridging aid III, which will apply from January, the maximum amount is to be increased from EUR 200,000 to EUR 500,000. The maximum grant is therefore planned for companies that are directly and indirectly affected by closings. The bridging aid is a grant for corona-related declines in sales. Fixed operational costs are reimbursed. For the companies affected by the closure, there should be advance payments similar to the November and December aid.

The costs of the extended bridging aid III are estimated at around 11.2 billion euros over a month with the ordered closings, according to a paper from the Ministry of Finance and Economics. According to the resolution paper, relief for trade is also planned – which, according to the associations, is not enough.

"Serious crisis" in the pyrotechnic industry

The President of the Central Association of German Crafts, Hans Peter Wollseifer, reacted more positively to the announced expansion of the aid: It is important not to leave the businesses and companies affected by the tougher requirements alone. "In this respect, we welcome the announcement of bridging aid III," said Wollseifer. "We would have wished otherwise and would have gladly waived the restrictions that have now been planned, but unfortunately the dynamics of infections are setting the pace for politics."

The manufacturers of firecrackers and rockets will plunge into a serious crisis due to the ban on selling fireworks on New Year's Eve. In case of doubt, the entire branch of industry is threatened with bankruptcy, explained Thomas Schreiber, Chairman of the Board of the Association of the Pyrotechnic Industry (VPI).

The association demands full compensation for the sales losses in the three-digit million range. Since the industry generates 95 percent of its annual revenues in December, association lawyers feared that companies would miss out on bridging aid. "We need separate aid funds to secure the 3,000 individual livelihoods in the industry," explained Schreiber.

Cultural Council calls for further help

After the decision by the federal and state governments not to initially ban fireworks, the companies started their main deliveries. Now the retail sector is faced with the problem of what to do with the goods. Since fireworks are a commission business, the damage must be borne by the pyrotechnic industry. According to the association, the industry recorded sales of around 130 million euros last year. Part of it has already broken away because there were hardly any stage or large fireworks for events in 2020.

The German Cultural Council meanwhile called for additional support for culture. This threatens a further worsening of the "situation that has been extremely tense for months," said the umbrella organization of federal cultural associations in Berlin. Managing director Olaf Zimmermann said the need was very great. "Companies in the cultural and creative industries are affected just as much as public cultural institutions and self-employed artists." Among other things, the Cultural Council demands that another billion euros be made available for the oversubscribed federal program "Neustart Kultur".

According to the will of the federal and state governments, the obligation to file for insolvency for companies is to remain suspended in January. The special regulation, which actually expires on December 31, should be extended by a month, announced the Mayor of Bremen, Andreas Bovenschulte. Accordingly, companies that are in distress due to the Corona crisis are currently not obliged to file for bankruptcy. According to Bovenschulte, however, the planned extension is not part of the resolutions made between the federal states and the federal government.

The German Association of Cities also welcomed the decided tightening of the corona measures. "The hard lockdown is painful, but the cities support it," said City Council President Burkhard Jung to the newspapers of the Funke media group. "Our country must get the pandemic under control again before it is too late and the infection situation gets completely out of hand," warned the Mayor of Leipzig from the SPD. Jung urgently appealed to the population to adhere to the new rules.

. (tagsToTranslate) Economy (t) Lockdown (t) Exit restrictions (t) Corona measures (t) Corona crisis (t) Pandemics