Germany Signs off on Paying Workers More During COVID-19 Pandemic


Germany has shown itself willing to take extreme measures to protect its citizens’ livelihoods during the pandemic. As evidence of this, consider the country recently signing off on legislation to top-up employee’s paychecks through another year.

A coalition party agreed to the legislation, which also included more short-term work subsidies. Moreover, the legislation has aid included for small businesses, helping them through the pandemic.

Reports have indicated that Germany’s economy shrank nearly ten percent from April to June, the second quarter of the year. This was, of course, due to the coronavirus pandemic.

In response to the economic hardships of the virus’ outbreak, Germany has moved quickly to preserve businesses and individuals’ paychecks.

Why This is Important

Germany’s swift deployment of aid to people affected by the virus has been the gold standard in the EU and beyond. The virus has had an unprecedented effect on the economies of countries around the world.

The United States, for example, has seen record unemployment and widespread financial insecurity.

Notably, the US is already a tough place to live in as a poor person. The lack of government spending on things like housing and social programs means that the poorest Americans have been bearing the brunt of the pandemic.

Germany, meanwhile, has been lucky to have functional coalitions in the government to sign off on spending legislation.

Historic Spending Legislation

The spending legislation is historic in scope. Olaf Scholz, the German finance minister, told reporters that the spending would cost an estimated ten billion euros.

This puts Germany among the countries spending the most money to ensure jobs are preserved through the pandemic. Other countries in Europe are taking varied approaches to the situation.

The UK, for instance, has relied on a program called the Coronavirus Job Retention Scheme. This scheme allows businesses to put workers on furlough without making them redundant.

However, UK Chancellor Rishi Sunak has confirmed that there are no plans to extend this program. The scheme is planned to wind down before October of this year, and is already scaling down in scope.

How Much Longer?

Health experts are divided over how much longer this pandemic might go on. The answer could change depending on the region. Europe and Southeast Asia have handled the pandemic better than regions like Brazil or the United States. As such, they might find the pandemic over sooner than other regions.

However, this will mean that travel restrictions may have to stay in place until affected regions have their case numbers fall to a safer level.