Coronavirus - what is the current situation in Germany?
16 March 2020
Schools and kindergartens have been closed as well as borders to most neighbouring states for private travel. In order to mitigate the economic consequences, the German government announced a comprehensive package of measures.
What is the current situation in Germany?
The federal states have ordered the closure of schools and kindergartens across Germany. Today, the Federal Government and the States agreed on guidelines to further reduce social contacts. Strict measures have already been passed by individual states, for example:
- In Berlin, for instance, under the SARS-CoV-2 Containment Order passed on 14 March 2020, all public and non-public events of more than 50 people are to be cancelled, all leisure facilities accessible to the public closed and visits to restaurants strongly regulated.
- In North Rhine-Westphalia, the government is being even more restrictive. Under an order issued by the Ministry for Labour, Health and Social Affairs on 15 March 2020, all public events are to be cancelled and all furniture stores and shopping centres are only accessible to a very limited extent and only in order to cover urgent or daily needs. Fitness studios, swimming pools, bars, museums, adult education centres (Volkshochschulen), music schools and other educational facilities are to remain closed. Sporting events and all other public events have been cancelled. Restaurants are only permitted to open subject to strict conditions, including that the contact details of all guests have first been registered and a minimum space of 2 metres is guaranteed between tables. Hospitals and care facilities must close their canteens and cafeterias and impose strict limitations on visitors. The order is to be implemented by the local authorities.
- In Bavaria, the government issued a blanket order today, 16 March 2020, banning events of all kinds up to and including 19 April 2020. Restaurants and retail businesses are no longer permitted to open, although exceptions have been granted for company canteens (until 3pm), food retail, petrol stations and other necessary goods.
The Federal Government has closed the borders to most neighbouring countries for private travel. Freight and commuters are not affected.
These new regulations present employers with significant challenges. They need to protect their staff, while at the same time ensuring that their delivery and performance obligations are met. There is no simple blanket answer to the question of whether the difficulties presented by the regulations can be cited by employees as justification for not coming to work. According to the latest opinions, it may at least be assumed that employees will be entitled to continued salary payments for a limited period, even if they are not able to go to work on account of the school and childcare closures. It is thus generally advisable to encourage use of a home office option as widely as possible.
The data protection authorities have issued information to the effect that they regard the processing of personal data relating to the health of employees and visitors to be compliant with legal requirements, provided it serves the containment of the Corona pandemic or the protection of staff. In this context, the authorities have stated that this includes in particular the processing of data regarding infections or people with whom persons with a proven infection have been in contact, as well as any travel to risk areas. Greater care must, however, be exercised in respect of any disclosure of such data, including, for instance, disclosing that a certain person has been infected with the virus. This is only permitted in exceptional cases if and to the extent that knowledge of the individual's identity is necessary in the context of precautionary measures by the contact persons. Such data must, in any event, be deleted again at the appropriate time.
What can we expect in the coming days?
As in Austria and Italy, more far-reaching measures, including curfews, may be implemented in Germany. The legal basis for such measures is the Federal Infection Protection Act (Infektionsschutzgesetz). On account of the federal structure, regulations in the individual states may vary, but they will be discussed and aligned across the country as far as possible on the basis of the guidelines agreed, as was the case with the school closures.
Under article 35 of the German Basic Law (Grundgesetz), the Federal Government may instruct police forces to cooperate across federal state borders and may deploy federal border police and the German armed forces as extra support.
What measures are being taken by the German government to support the economy?
The German government has announced a comprehensive package of measures designed to mitigate the economic consequences of the Corona pandemic and to offer short-term assistance to companies that are suffering difficulties on account of the crisis.
The programme comprises three pillars:
- The requirements relating to applying for a short-time work allowance (Kurzarbeitergeld) have become more flexible. The Bundestag and Bundesrat passed the necessary statutory foundations on 13 March 2020. Companies will be given the opportunity to introduce short-time work (Kurzarbeit) more quickly and easily and to receive increased state support in this context. This can make a significant contribution to relieving the financial impact felt as a result of operational restrictions.
The Federal Employment Agency (Bundesagentur für Arbeit) is responsible for overseeing the system.
- Tax payments that fall due may be deferred interest-free and pre-payments may be adjusted.
The local tax office is responsible in this context. For certain taxes, such as energy tax, the relevant applications must be filed with the customs authorities.
- Finally, a comprehensive "protective shield" has been promised for companies.
- Existing funding programmes offered by the state bank KfW are to be expanded. Applications are to be made direct to the KfW or via companies' normal banks on the basis of the existing programmes.
- Existing guarantee programmes and Hermes cover arrangements for exports are being expanded. Applications are to be made via the individual states' development banks (Förderbanken) and Hermes guarantees (for exports) are to be applied for using the standard procedures.
- The Federal Government has also pledged to launch special programmes for companies experiencing particular financial difficulties, even potentially including the assumption of liabilities and equity injections. These measures are currently being discussed with the European Commission, which has signalled flexibility, since these measures (in contrast to a/b) require new state-aid approval.
In order to bolster the aid package already resolved by the Federal Government, the German Federal Ministry of Justice and Consumer Protection (Bundesministerium der Justiz und für Verbraucherschutz; BMJV) is preparing a statutory provision for the suspension of the obligation to file for insolvency with effect until 30 September 2020 to protect businesses which run into financial difficulties as a result of the Corona epidemic. With this measure, it is intended to prevent businesses from having to file for insolvency for the reason alone that they did not receive the aid promised by the Federal Government in due time for organisational or administrative reasons. Such suspension is subject to the prerequisites that the grounds for the insolvency were triggered by the effects of the Corona epidemic and that there are well founded prospects of a successful restructuring because public aid was filed for and/or serious financing and restructuring negotiations were initiated. In addition, it is intended to grant the BMJV the authorisation to issue a legal ordinance in order to renew the measure for a period ending no later than on 31 March 2021. These measures are modelled on the provisions introduced when the flood disasters hit in 2002, 2013 and 2016.