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Coronavirus: Germany counts costs of economic shutdown

Trying to contain the coronavirus could prove costly. A new study warns of a hit of between 7.2 and 20.6% of GDP. As restaurants and other services shut down on Monday, the government announced an emergency budget. Germany's finance and economy ministers on Monday unveiled an emergency budget with a raft of measures aiming to control the costs of the coronavirus.  They aim to pass it into law by the end of the week. Neither minced their words on the prospect of a recession in 2020. Germany News "We don't need to speculate; it's clear there will be a negative economic impact. Anyone could say that just by looking at the empty high streets," Finance Minister Olaf Scholz told journalists in Berlin. Economy Minister Peter Altmaier added that this downturn would "probably be at least as large as during the financial crisis" of 2007-8.
According to a report released on Monday by Germany's influential Ifo think tank, a partial economic shutdown could cost the country between 7.25 and 20.6% of GDP, based on a range of estimates assuming partial shutdowns ranging from one to three months in length.
"The costs are likely to exceed anything Germany Medical News has experienced in recent decades as a result of economic crises or natural disasters," Ifo's president, Clemens Fuest, said. "The crisis will also cause massive upheaval on the job market. This could put the situation at the high point of the financial crisis into the shadows."

Bridging loans for small businesses, huge health spend boost

In total, the government is earmarking up to €750 billion that it could spend as a result of the coronavirus fallout. To give an idea of the sheer scope, that sum is almost double the entirety of the federal government's previously approved 2020 budget.
Perhaps the most crucial part of the emergency budget is a hefty health care spending increase of more than €3 billion ($3.2 billion), seeking to double the number of intensive care beds — currently around 28,000 — available in Germany Political News
Small businesses and independent operators such as artists or carers will be eligible for loans of up to €15,000 over a period of three months to cover costs of inactivity. Larger companies will have the opportunity to take out bridging capital via a special fund, plus the prospect of direct government intervention at a later stage if necessary. The lending powers of Germany's KfW state development bank will also be expanded drastically. Germany Latest Updates
Other measures agreed in the budget include protection for renters unable to meet their bills, with non-payment owing to the coronavirus ruled out as reasonable grounds for eviction. Rules on short-time work will also be altered, aiming to stop companies from having to let people go if they fail to provide sufficient hours to staff. Insolvency rules will also be loosened, while publicly traded companies will be permitted to hold their shareholder meetings via videoconference rather than being obliged to hold a physical meeting. Germany Distribution Services

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