Germany to extend coronavirus furlough scheme to two years

19 August 2020, 18:56

Chancellor Angela Merkel has said she is behind the extension
Chancellor Angela Merkel has said she is behind the extension. Picture: PA

By Maddie Goodfellow

Germany is set to extend its coronavirus furlough scheme to two years, with Chancellor Angela Merkel supporting the proposals.

The German furlough scheme, named "kurzarbeit", is currently limited to 12 months.

However, ministers said it made sense to extend it as coronavirus is still curbing business activity and the German economy.

Finance minister Olaf Scholz said on Sunday: "The coronavirus crisis won’t suddenly disappear in the next few weeks.

“Businesses and employees need a clear signal from the government: we’ve got your back for the long haul in this crisis, so that no one is being let go without need.”

A final decision will be made on August 25, but Angela Merkel's spokesperson said she supports it in full.

"Kurzarbeit" currently allows companies to apply for funds if at least ten per cent of their workforce have lost at least ten per cent of working hours.

Companies are estimated to have signed up about 10.1 million workers to the scheme so far.

It comes as the UK's furlough scheme, which pays 80 per cent of furloughed workers' wages up to £2,500 per month, has started to be rolled back.

Then from September, the amount the government pays will drop to 70 per cent of wages up to a cap of £2,187.50, with employers meeting the difference to bring the pay up to 80 per cent of wages.

In October, the government contribution will reduce again, to 60 per cent of wages up to a cap of £1,875 for the hours the employee is on furlough.

Again, companies will need to pay workers so that they receive at least 80 per cent of their normal wage.

At the end of October, the furlough scheme will end completely, chancellor Rishi Sunak has said.

Opposition parties have said the scheme should be extended at the end of October to avoid the mass redundancies feared by some commentators.

Labour's Shadow Chancellor Anneliese Dodds said: “The chancellor’s refusal to abandon his one-size-fits-all withdrawal of furlough is a historic mistake that risks a python-like squeeze on jobs in the worst-hit sectors.

"The reward for months of hard work and sacrifice by the British people cannot be a P45.”

Latest World News

See more Latest World News

Shattered building in Mariupol

Ukrainian leaders fear repeat of Mariupol horrors in Donbas region

A grieving woman at the memorial

Girl ‘pleaded for police help’ while officers waited outside massacre classroom

Iranian collapse

Iranian police disperse crowd gathered at collapsed building

Wang Yi

Chinese foreign minister visits Samoa to deepen Pacific ties

Donald Trump called for the end to gun-free zones in schools

Trump calls for end to gun-free school zones after 'savage and barbaric' Texas shooting

Fusako Shigenobu and her daughter Mei

Japanese terror group founder freed after serving 20-year sentence

People work on a flooded field

13 dead, three missing after torrential rains in southern China

Protesters hold a rally at Discovery Green Park, across the street from the National Rifle Association Annual Meeting held at the George R. Brown Convention Center Friday, May 27, 2022, in Houston.

Governor claims he was ‘misled’ about response to shooting

Russian Emergency Situations Ministry workers disassemble a destroyed building in Mariupol, in territory under the government of the Donetsk People’s Republic, eastern Ukraine, Friday, May 27, 2022

Russian Communist deputy makes statement of opposition to war in Ukraine

Texas School Shooting

School shooting survivor covered herself in friend’s blood and played dead

Texas shooting

Governor says he was ‘misled’ about response to shooting

Investigators search for evidence outside Robb Elementary School in Uvalde, Texas

Children called 911 during Texas school shooting saying ‘please send police’

A damaged building ruined by attacks in Hostomel, outskirts Kyiv, Ukraine (Natacha Pisarenko/AP)

Russia squeezes Ukrainian strongholds in east

NATO sent two Norwegian F-35s to respond to the Russian planes

NATO scrambles fighter jets to intercept Russian aircraft near border with Finland

Footage of the shocking incident has been shared widely online

Man dies in boot of police car in Brazil after officers turned it into 'gas chamber'

A worker disinfecting a table in Pyongyang

Doubt cast on North Korea’s claim of just 69 coronavirus deaths