Sunday , 26 November 2023
Home Global Economy The crux of the repayment
Global Economy

The crux of the repayment

In the Brandenburg Spreewald, tourism is currently almost non-existent. That is also the experience of restaurant and hotel entrepreneur Dirk Meier in Burg. Here he runs the "Zum Schlangenkönig" guesthouse, a complex with 16 double rooms, seven suites and three holiday apartments. Massages, sauna and wellness are part of the offer. For the past two years, only a fraction of the usual guests have come.

Meier applied for bridging aid – but part of the sum was rejected. Because the original funding conditions changed several times – after he had already submitted the application and planned the money, as Meier says. He feels fooled: "You can't change the rules three times after submitting an application and end up with a completely different result! Then I wouldn't have applied for it."

Funding conditions changed several times

In fact, the responsible Federal Ministry of Economics changed its subsidy rules several times – and leaves the interpretation of what is eligible to the federal states. The result: Initially, investments in digitization and hygiene were considered eligible, but now companies are receiving a number of rejection notices – usually after the money has already been spent. In addition, what is eligible for funding in one federal state is not in another. And that despite the fact that the bridging aid is paid for from a nationwide pot. An extension of the bridging aid for companies with corona-related sales slumps until the end of June has just been announced.

Olaf Lücke from the German Hotel and Restaurant Association, DEHOGA, in Brandenburg speaks of funding chaos. Many hoteliers and innkeepers would have taken real money into their hands, because: "With the bridging aid, the companies were told: 'You can also invest'."

"Feel a little betrayed"

Philipp Gärtner runs the "Scandale" club in Cottbus. In order to be able to keep his business open even under Corona conditions, he has invested heavily in more hygienic equipment in the sanitary facilities. A total of one million euros, as he says: "Soap dispensers, taps, toilet flushing: everything is contactless. And now afterwards we have been informed that we cannot estimate these costs. And we now feel a bit kidded because we now have to pay for everything out of their own pocket."

DEHOGA representative Lücke also criticizes this: "As of now, many are left sitting on it because suddenly they say: That was not a necessary investment, that was an investment backlog." And Lücke emphasizes that there are certainly things that are actually not worthy of funding. But he is bothered by the back and forth of the authorities: "We don't want to whitewash any fraud here, we just want sensible investments to be properly billed."

Later trouble also with the emergency aid

In retrospect, there is also trouble with the first Corona grants that the state had paid out: the immediate aid from spring 2020. Brandenburg was one of the first states to launch a program at the time. Companies should be given a quick, unbureaucratic helping hand during the first lockdown. The problems started shortly afterwards. "The conditions changed here when the state and federal programs were merged," said Lücke. As with the bridging aid, other rules suddenly applied.

The rude awakening for many entrepreneurs came long after the payment was made, when the assessments were checked. "Then it suddenly said: Personnel costs and entrepreneur's wages cannot be settled," said Lücke. "Actually, one relies on the fact that this applies. If then two years later they say: 'April, April', then that is not reliable."

The recoveries can complicate the economic recovery of many companies. On the one hand, there is hope, since the corona measures are at least partially expiring or could be relaxed; on the other hand, many companies are on shaky ground after the dry spell. The fact that subsidies, which were believed to be safe for a long time, are to be repaid right now is a nuisance for many – and could, at least in individual cases, still endanger economic survival.

Leave a comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Related Articles

Global Economy

Spotlight on 2023: S&P 500 and the Significance of the 4400 Level

In our past exploration of the financial landscape of 2023, we delved...

Global Economy

AI and Data Analytics Drive Efficiency in Money Laundering Detection

BIS Innovation Hub Turns to Tech for Money Laundering Detection The BIS...

Global Economy

Russell 2000 Gains Momentum as Tech Stocks Outperform Value

Tech stocks have dominated the equity markets in recent months, surpassing value...

Global Economy

Crypto Exchange Bybit Announces Exit from Canadian Market Amid Regulatory Changes

Regulatory Shifts Prompt Bybit's Strategic Withdrawal from Canadian Crypto Market