BERLIN (Reuters) – Germany has the fiscal strength to mobilize further state aid of up to 50 billion euros ($60.5 billion) for companies affected by the second coronavirus lockdown, Economy Minister Peter Altmaier said on Thursday in a speech in parliament.
This comes on top of grants already paid out of roughly 80 billion euros, an additional 23 billion euros as part of the Kurzarbeit job protection scheme, and a multi-year stimulus programme worth 130 billion euros, Altmaier told lawmakers.
Chancellor Angela Merkel’s government has since March unleashed an unprecedented array of rescue and stimulus measures which helped cushion the impact of the COVID-19 pandemic on Europe’s largest economy last year.
Gross domestic product shrank by a smaller-than-expected 5% in 2020. That was surpassed in the post-war era only by the record -5.7% in 2009, during the financial crisis.
But the government slashed its GDP growth forecast on Wednesday to 3% this year, a sharp revision from last autumn’s estimate of 4.4% due to a second coronavirus lockdown.
Altmaier has painted a picture of a two-speed economy in which industry continued to do well while services were suffering under the curbs that were imposed early in November and tightened in mid-December.
(Reporting by Michael Nienaber; Editing by Maria Sheahan)
