Germany to pay another 12 months of furlough

Germany has extended its furlough scheme until the end of 2021 despite reservations in Angela Merkel’s party about a bill that may exceed €30 billion. The measure is intended to buy time for the economy to recover after GDP contracted by 11.7 per cent over the first six months of this year. It is expected to take until late next year or early 2022 to regain the lost ground. At the peak during lockdown 10.1 million workers, including one in three in the industrial sector, were on furlough. The number is thought to have fallen to about 5.2 million by late July. The Kurzarbeit (short-time work) scheme, which has roots in the early 20th century, is normally restricted to 12 months. It began in January and had been due to run out on December 31.