Germany

General overview

While falling short of a nationwide lockdown, on 22 March Germany undertook new restrictions to limit social contact (beyond members of one's household) to an absolute minimum for at least two weeks.

The restrictions include banning public gatherings of more than two people, and closing of restaurants (except for pick up and deliveries). Service providers such as hairdressers and massage studios that were previously allowed to stay open have now been told to close.

Citizens are still allowed to leave their homes for exercise, medical appointments and to go to the supermarket, as long as they practice safe social distancing measures.

Given Germany's federalised system, it is up to its 16 individual states to implement the measures. Four states (including Bavaria on Friday) have imposed more wide-ranging restrictions on movement.

The German Farmer's Association has warned of a looming shortage of seasonal workers as a result of the coronavirus border restrictions, with implications for planting and harvesting. It is subsequently likely that measures will be put in place to facilitate or ease restrictions on the supply of a seasonal work force.


Economic situation

On the economic front, the situation in Germany is serious and the outlook is worsening. German business confidence has dropped to its lowest level since 2009, and deepest drop since 1991. Various economic forecasts now predict a serious recession for Germany this year, somewhere between -1.5% and -11%. Some longer-term estimates put GDP impact as high as -20%.

Government and business response

The German Minister of Finance announced an economic rescue package worth €150 billion and has signalled a change to rules to permit higher levels of Government borrowing. Read more about the package via the Federal Ministry for Economic Affairs and Energy (English language).

The economic rescue package comprises of four pillars:

  • Short-time compensation (Kurzarbeitergeld): allows companies that put their workers on reduced hours as a result of the coronavirus outbreak to receive state support to compensate workers. In implementing this system, the government is falling back on existing instruments and simplifying the application requirements for firms – including lowering the quorum of affected workers in a firm to 10%, partial or complete removal of negative work hours balances, extending short-time compensation to temporary workers, and offering complete coverage of social security contributions through the federal labour agency.

  • Liquidity support for firms through tax relief: as agreed with the federal states, companies will be able to defer billions of euros in tax payments, and make reduced advanced tax payments, with reduced enforcement measures until the end of the year. More specifically, tax authorities will have the ability to approve delayed payments if a company would face "significant hardship" if forced to pay.

  • Unlimited-size loans to companies and businesses affected by COVID-19: to prevent them collapsing because of the pandemic. The German government is providing these liquidity assistance programmes by easing conditions for KfW (the German state development bank) loans and launching additional special KfW programmes.

  • Strengthening European solidarity: Germany has pledged €25 billion towards the European Commission's "Corona Response Initiative", emphasising the need for flexibility in the application of rules (e.g. banking supervisors' signal to banks to use "wiggle room" as part of ensuring they can continue to reliably supplying the market with liquidity, and the European Central Bank's announced liquidity support measures).

Advice to exporters

In terms of immediate activity, make the safety and well-being of teams your priority, and invest as needed to ensure a safe and healthy working environment. Many businesses are still allowing employees to work from home where this is possible. Check in with your business partners and see how they are doing and how you might be able to support them during this time.

Further insights

The IFO Institute has released further information on the potential cost of COVID-19 to the German economy. Read an English-language summary here.


Additional resources

Below you can find information and contact details for other New Zealand government and international agencies regarding their response to COVID-19.

New Zealand Government agencies

Business.govt.nz
Covid19.govt.nz
New Zealand Customs
Ministry for Primary Industries (MPI)
MFAT Export helpline
MFAT Safetravel
Immigration
Ministry of Health

Global agencies

World health organisation (WHO)
Centres for Disease Control and Prevention (CDC)

Contact NZTE

We're available to talk to you about any issues your export business is facing due to COVID-19.

For existing NZTE customers, please contact your New Zealand-based Customer Manager.

If you're unsure who to contact or haven't worked with us before, you can call NZTE on 0800 555 888 or email below and one of our Customer Advisors will help you.