Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

German Companies Ask for Wage Support for Half a Million Workers

Published 2020-03-31, 08:14 a/m
Updated 2020-03-31, 08:36 a/m

(Bloomberg) -- Almost half a million Germans applied for financial aid under a government support program in March, when factories and other businesses were forced to shut because of the coronavirus outbreak, the Labor Ministry said on Tuesday.

The pandemic sparked thousands of furloughs in Europe’s largest economy, a development echoed across the continent. Figures published Tuesday showed 470,000 sought kurzarbeit, a form of state wage support, this month.

The measure allows businesses to reduce workers’ hours or halt production while still paying them with the help of government salary subsidies.

Carmakers Volkswagen (DE:VOWG_p) AG and Daimler AG (DE:DAIGn) and sports-apparel maker Puma SE are among those planning to idle tens of thousands of staff. Even financial institutions like Deutsche Bank AG (DE:DBKGn) are considering such moves.

Figures published earlier on Tuesday showed little change in the number of people officially out of work in March. However, that report was only based on data available through March 12 and fails to capture the impact of the lockdown.

Germany’s strong labor market was a bright spot for the economy throughout last year, propping up domestic spending when trade tensions weighed down manufacturing.

Economists warn that a recession in Germany is unavoidable. Even if most measures aimed at containing the virus are lifted in mid-May, allowing the economy to recover through the summer, output is expected to shrink by 2.8% this year, according to a report published by government advisers on Monday.

 

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.