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On the downside of companies: the federal government has secretly changed the conditions for supporting Corona – the economy

Peter Altmaier (CDU) and Olaf Scholz (SPD) did not spare big words. No entrepreneur was left alone in the crisis, it was repeated over and over again, when one aid tool after another was introduced during the crisis year. The financial “bazooka” has become synonymous with generous crisis relief; the Federal Minister for the Economy and the Federal Minister for Finance liked each other in the role of sovereign crisis managers.

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However, doubts about whether the federal government can deliver on its promises continue to grow. As “Handelsblatt” first stated, the conditions for the payment of bridging aid II have been changed several times – to the detriment of many companies. This is due to the EU’s right to donate aid, which ministers probably did not take into account in their announcement. At the end of November, the federal government reached an agreement with Brussels. But changes were necessary.

From the beginning of December, paragraph 4.16 states in small print that bridging aid is a “contribution to the company’s uncovered fixed costs”. The company therefore needs uncovered fixed costs and must suffer a loss to obtain bridging support. Altmaier and Scholz have always given the impression that the measure for a refund was only a reduced turnover – not that the state would intervene only in the event of losses.

Following a storm of protests, the Ministry of Economy announced that it would not be necessary to resubmit old applications. In the case of applications submitted before 5 December 2020, the exact state aid requirements for aid with fixed costs according to the criteria catalog were not yet known.

However, the changes could prove costly for many victims: “If we find out retrospectively that the relevant conditions under the State Aid Act have not been met, a correction will be made as part of the final settlement,” he said. Millions of installments could therefore be due.

Impacts also on November and December support

For medium and large companies, these changes could also have a negative impact on the payment of aid in November and December. Thanks to these two programs, the federal government has promised to support the companies affected by the closure in the last two months of last year by repaying up to 75 percent of sales in the same month last year.

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However, according to an overview of the federal government’s subsidy regulations, the new guidelines for fixed cost support also apply to support from November and December, if they reach more than one million euros. Then the maximum accumulated loss is replaced, but not the higher loss of sales.

Peter Altmaier (CDU) likes to see himself as the protector of the economy. Imago images / photothek / xFlorianxGaertnerx

However, according to tax advisors, not only access conditions but also the amount of aid payments could change for many companies. Under the new rules, only 90 percent of uncovered fixed costs can be financed for bridging aid to small companies, according to the Handelsblatt. Previously, there was only a 70 percent limit for medium-sized companies.

The excitement of the Federal Ministry of Economy cannot be understood. The spokeswoman said that the conditions of the application had not been “secretly” changed. You are constantly adjusting all points all the time – always according to the currently valid support framework. “We assume that the level of funding for most companies will not change, as the aid affects those companies that are hard hit and can therefore usually show losses in these difficult times,” the ministry said.

The applicant is also given considerable flexibility in determining losses. It is not limited to the losses of November and December 2020, but may include all loss months since the start of the corona pandemic in March 2020, if sales fell by more than 30 percent. It is also emphasized that no loss declaration is required for November and December aid with sales of less than EUR 1 million.

The money is barely coming

Tax advisors are outraged by this approach – especially that changes are not communicated openly. Valentin Schmid, vice president of the Association of Tax Advisers, told the Augsburger Allgemeine on Tuesday that complicated regulation was hampered by the fact that “virtually no questions can be asked and electronic applications leave no room for information or additions.” However, this would be urgently needed from applicants: “Because incorrect information can quickly lead to allegations of grant fraud.”

Schmid also criticized the retightening of the bridging corona device. Contrary to what has been announced, bridging aid should only be paid for actual losses in the form of uncovered fixed costs is fatal for the companies concerned, the vice-president of the Federal Association of Tax Advisers said in a newspaper. “The companies involved react with disappointment and frustration.” His association expects a significant number of business failures, “which tend to increase if there are subsequent restrictions.”

Associations also criticize that the application is too complicated. “We simply will not get support from our companies. The request is too bureaucratic, “German craftsman Hans Peter Wollseifer told the German city of Anzeiger on Tuesday. The figures support this: out of an estimated € 15 billion, only € 1.2 billion is currently paid out. (with AFP, HB)

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