Support in corona crisis: Coalition decides to help families and companies

Support in the corona crisis
Coalition decides to help families and companies

The corona crisis is a financial burden for many companies and families. The grand coalition wants to provide relief with a series of measures. Low-wage earners, cultural workers and the catering industry should also benefit.

The grand coalition wants to cushion the negative consequences of the corona pandemic for families, low-wage earners, the economy and culture with new billion-dollar aid. As in the previous year, families should receive a child bonus. The surcharge on child benefit should be a one-off 150 euros, as the tips of the CDU / CSU and SPD announced late in the evening after the coalition committee in the Chancellery. This bonus should be offset against the tax-free child allowance, but not offset against the basic security.

Adult recipients of basic income support should now also receive a one-time Corona grant of 150 euros. For the self-employed and employees with low incomes who suddenly find themselves in need, the easier access to basic security will be extended until the end of 2021.

The grand coalition is also helping companies with corona-related losses. With an extended loss carry-back, you should be able to offset these losses in your tax return more extensively than before with profits from previous years. It is planned to double the loss carry-back – to a maximum of 10 million euros or 20 million in the case of joint investments.

Lower VAT for gastronomy will be extended

The CDU / CSU and SPD also want to help the catering industry, which is particularly hard hit by the lockdown. A reduced VAT rate of 7 percent will continue to apply to meals in restaurants and cafés until the end of 2022. Originally, the regulation was limited to the end of June.

The cultural workers also receive further support. According to the coalition's decision, a follow-up program for the rescue and future program "Neustart Kultur" will be launched with a further one billion euros.

The SPD chairmen Saskia Esken and Norbert Walter-Borjans were very satisfied with the five-hour negotiations. "We got a lot out of it for families, for people with a difficult income situation, but also for tradespeople and restaurants," said Walter-Borjans. The most important thing is "a piece of help" for people who came under pressure during the Corona period. Esken emphasized that there was no great resistance among the coalitionists on any point.

It was a "very harmonious coalition committee," said Union parliamentary group leader Ralph Brinkhaus. "So that shows that the coalition is quite capable of acting in the crisis." The new CDU chairman Armin Laschet, who took part in the top round for the first time, "fitted in perfectly". He was already well connected in Berlin and didn't need a long training period, said Brinkhaus. "It was like he was always there."

"A successful coalition committee"

CSU regional group leader Alexander Dobrindt emphasized that it was "an all-round successful coalition committee". The advice was given in a very good atmosphere. "That was not necessarily to be expected, because one or the other statements in advance already had the feeling that one could also be in election campaign mode." This suspicion was "not confirmed," said Dobrindt.

CSU boss Markus Söder explicitly praised the resolutions. The Bavarian Prime Minister tweeted after the deliberations that it was "good news" in the Corona crisis that secured livelihoods, created the necessary liquidity and benefited those particularly affected.

According to Esken and Walter-Borjans, the new aid can be financed within the existing financial framework without a supplementary budget. The corona subsidy for recipients of basic security and the child bonus cost the state around 3 billion euros, the lower value added tax in the catering sector adds up to around 3.5 billion euros. In addition, there is 1 billion for the cultural sector. In contrast, it is currently difficult to estimate the financial impact of the tax relief for companies.

On the only topic not related to Corona, the planned euro drone, the CDU / CSU and SPD agreed to bring about the necessary resolutions so that the contracts for development and procurement can be signed in March. The industrial contract does not include arming the drone, it says in its decision paper.