How self-employed businesses are affected by Coronavirus in Germany?
The economic crisis triggered by the coronavirus is putting severe consequences on some sectors and the consequences can be devastating.
Most affected are ones:
- Self-employed or freelancers
- Small businesses with less capital
Self-employed people, as well as small businesses, are the ones receiving most of the bad effects. Professionals like repairers, drivers, lawyers, musicians, photographers or artists fear for their future and do not see that the Government will protect their future.
Well in a state of emergency, people are always worried about their survival. In such conditions, it’s the state which helps the citizens to cope up with the situational problems and let them survive until the conditions get better.
- Coronavirus in Germany: Businesses need aid
Due to the Coronavirus concern, not in a specific region but in the entire world people are worried about their financial future.
Due to the
- The lockdowns
- Low trading
- Unavailability of resources
Small businesses are unable to keep working for their survival. Small businesses and freelancers do not have such a capacity to compensate for their losses in the short term to keep moving in the market. However, at the same time, these small businesses and freelancers are contributing to each country’s economy. Therefore, these small businesses and the freelancers should get help in the form of aid to keep working during the Coronavirus issues.
Keeping the concern of Coronavirus in Germany in mind, Germany is the one which took initiative for these freelancers by providing them with the necessary aid to help them keep running their businesses and pay the utilities. In Germany and also across the globe the efforts of the German Government to help small businesses is appreciated.
- Germany is leading
In Germany, the government is already finalizing a massive financial aid package to bail out individual freelancers and small businesses with up to 10 employees in Germany, badly affected by the coronavirus crisis, according to German media. This news is like an easy way out for those small businesses which are getting most of the bad effects of the Coronavirus.
The exact amount of aid that is going to be delivered to the citizens of Germany running their own small businesses and are not able to manage the finance in the presence of a pandemic is around 30 to 40 billion euros.
Specifically, the government plans to provide a total of € 40 billion for an aid purpose to help owners to stabilize their business.
These would be divided into:
- 10 billion as direct grants for one-person operations and small businesses.
- Remaining 30 billion in the form of loans.
According to Economy Minister Peter Altmaier, he told Deutschlandfunk radio that the Executive intends to approve this plan next week to “help those who urgently need it.” While specifically mentioning those running small businesses in Germany to help build the economy.
The country’s Ministry of Economic Affairs has indicated that there should be no “solidarity gap” for small businesses and the self-employed. “The chain is as strong as the weakest link that is why we shake hands with everyone: the little ones and the big ones. After all, that is what characterizes our social market economy, and that is exactly what this crisis will make us survive, “he added.
- Change in the country’s budget policy
Due to the Coronavirus pandemic, the economies are badly hit and no one knows how long it would take to wipe out Coronavirus from the world. Therefore, countries need to re-plan their budget policies to be able to fight against the current pandemic. Considering this as an appropriate act at the right time the German Government decided to revise its budget policy.
In addition, German Finance Minister Olaf Scholz wants to organize a special government fund that the self-employed can draw on for loans. This “solidarity fund” is currently being developed by experts from the Ministries of Finance and Economy and this will surely be a great financial help from the state to the citizens.
- The program would mark the point where Germany departs from its policy of balanced annual federal budgets. After years of budget surpluses, the German government is no longer authorized to borrow money for the federal budget, so a special supplemental budget would be required.
- The objective of this program is to distribute money quickly and with the least possible bureaucracy.
- Germany’s plan for distribution seems to be effective as the small businesses have already suffered a lot to keep themselves in a market and to pay the utilities. Therefore, it’s good to provide them aid as early as possible.
- Transparency to avoid decline of state economy
To keep the transparency, the government decided to come up with solid plans in order to make small businesses stronger as well as to maintain the country’s economy. The government wants to check later if the beneficiaries really needed that help. In case the help is not considered necessary, the money lent to the independent professional or the company could be converted into a loan. This would allow the government to guarantee that any money that has been distributed without justification is returned.
- If individuals have taken money with a proper concern of aiding the business, it will be fine.
- If the audit comes with no appropriate need for the money then it will be converted to the loan which surely helps back the state in terms of interests.
Chancellor Angela Merkel’s special coronavirus crisis cabinet is expected to discuss the measures Thursday afternoon. Germany is home to up to 5 million freelancers, many of whom have lost all their jobs in recent weeks. Quoting these statements of the Chancellor, we can know how much Germany is concerned about the freelancers and the freelancing market.
- Last Verdict
As in many other countries, the freelancers are one of the major sources of drawing the money to the state. Keeping this thing in mind and giving it importance in regards to the country’s economy all the other states must have come forward to initiate such aids. Keeping the freelancing market alive is crucial during the pandemic but together and with the initiative of the governments like Germany has taken, the self-employed businesses will surely not shut down so quickly. Hopefully, the impacts of Coronavirus in Germany on the small businesses and freelancers can be alleviated with the help of the German financial rescue package.