Coalition parties in Germany have come to an agreement over extending relief measures to offset the damage caused to the country’s economy due to the coronavirus pandemic. In Q2 2020, the German economy contracted at the fastest rate ever recorded as the country and most of the world went into lockdowns to contain the spread of the pandemic.

Relief measures to compensate for the economic impact of the pandemic include short-time work subsidies as well as freezing insolvency rules, both of which will soon be extended as the coronavirus rages on across Germany and the rest of the world. The short-work subsidies scheme was due to expire in March 2021 but has now been prolonged until the end of next year and could offer significant support to small and mid-sized businesses.

In addition, companies facing financial difficulties due to the pandemic and the resulting lockdown can delay filing for insolvency until the end of 2020. This move will help potentially reduce the number of bankruptcies being caused as a result of the pandemic.

Leader of the conservative Christian Democrats (CDU), Annegret Kramp-Karrenbauer, commented, “Corona remains a reality and a challenge. Today we have agreed that we will extend important and effective measures to how we deal with the coronavirus.”