German Companies Applied for Less Coronavirus Aid than Was Allocated

After a good year of the Covid-19 pandemic, German companies have received less coronavirus aid than policymakers had allocated. This is the finding of a report published by the ifo Institute’s Dresden Branch. “Only a fraction of the budgeted aid has been paid out to companies affected by the Covid-19 pandemic,” says Selina Schulze Spüntrup, a researcher at the ifo Institute’s Dresden Branch. “Partly, this is because some of the eligibility criteria were drafted quite strictly in order to rule out abuse. Moreover, when the funds were allocated, it was also not clear how many companies would actually claim the aid.”

To mitigate the financial consequences of the coronavirus crisis for the affected companies, Germany’s federal and state governments launched various aid programs. The federal government allocated EUR 150 billion in subsidies. Companies have applied for around 24 percent of this so far. It also budgeted for EUR 50 billion of emergency aid, of which less than one-third has been used.

Total disbursements from subsequent bridging aid are also significantly lower than the budgeted amounts (bridging aid I: 5.6 percent, bridging aid II: 10.4 percent, bridging aid III: 28.18 percent). Of the November aid, about 56 percent of the available funds were paid out, and of the December aid, about 33 percent. As for loans from the KfW special program, which are available in unlimited amounts, a total of around EUR 46 billion has been agreed to date.

The complete article by Schulze Spüntrup and Fabian Wagner can be found under the title “Funding Programs During the Coronavirus Crisis – an Interim Conclusion” in issue 03/2021 of ifo Dresden berichtet (in German only).