Germany Boosts Already Hefty Coronavirus Stimulus

Germany is beefing up its already formidable stimulus package to prop up its economy through the Covid-19 pandemic, brushing away concerns from some economists that the state is keeping insolvent businesses afloat artificially. Wage subsidies for furloughed workers, the flagship measure in the country’s new package, will be extended by 12 months to the end of 2021, in contrast with most other European countries, whose programs are set to expire in the coming months. Furlough programs, known in Europe as short-time work, allow companies to temporarily idle workers without resorting to payroll cuts. So far, the program has allowed Germany to avoid a spike in unemployment and could help businesses adjust faster to rising demand when the economy normalizes. The 5.6 million workers currently enrolled can earn up to 87% of their pay from benefits while working reduced hours or not at all.