Germany extending furlough to 24 months!

[latticechaos]

Saw that Germany was planning to extend their furlough scheme to 24 months because they don't expect the crisis to ease any time soon and they want to help citizens.

Made me feel pretty really, UK is going to see a sackload of job losses over the next few months.

I always felt the French plan for part time furlough was better than our scheme. UK scheme was very generous short term but has a hard ending.

@FrenchItalian

Which new jobs will people transition into though? There are few vacancies and the recession just starting.

The miners were offered retraining. Still no jobs to go to.

Lazy question (because I can't be bothered to so the legwork) - what sorts of jobs are still being furloughed? My DB works in ecology and is still off, but he's the only one I know.

I agree with FrenchItalian, it is pointless paying furlough indefinitely as some jobs have disappeared. My cousin has been given redundancy notice - she has worked in business conferences for 30 years. They have, going forward zero bookings. Businesses have lapped up the fact that zoom/teams is far more cost effective than physically attending a conference and regular clients have stated they have no plans to resume - Covid or no Covid. Of course this impacts heavily on the hotel/airline trades/caterers etc etc.

It is pointless paying furlough indefinitely as some jobs have disappeared

I fear once lots of furloughed people become unemployed, the economy is on a very steep downward spiral.

Germany usually get it right. Considering they lost the last world war they got the country running again about 10 years sooner than we did

Of course the UK should follow, but doubt it will, we'll just go for mass redundancies and recession. Shortly followed by repos.

Entertainment and music is still furloughed.

No I don't. It's just putting off the inevitable. Things are going to be permanently changed and paying people to sit at home and a pay them for jobs which don't really exist anymore seems not the best use of taxpayers money. I think the government have supported businesses through the readjustment to ensure they don't go to far but ultimately you can't keep paying people for roles that are no longer there

Shortly followed by repos.

Undoubtedly

Going to be carnage I think.

I thought the idea of some sectoral furlough extension was good. Weddings, theatres etc.

If it's a skilled job the companies will still furlough then I would imagine. For cinemas anyone can serve popcorn - why should the tax payer pay for someone to sit in their butt for another 12 months when there are plenty of people available to do that when it reopens

@whereorwhere

If it's a skilled job the companies will still furlough then I would imagine. For cinemas anyone can serve popcorn - why should the tax payer pay for someone to sit in their butt for another 12 months when there are plenty of people available to do that when it reopens

Companies any afford to furlough.

Sorry, any = can't

The German tax system is a bit more complicated. Yes you get a benefit if you are married - but only one you can claim that, so it depends how the salaries differ.

The main difference between Germany and UK is that in Germany the furlough is more used to cut hours rather than employees. So most people on the scheme are still working (earning/ paying tax and spending). I don’t know anyone who is just at home but plenty of people working 70-80% of their usual hours (I’m on Germany).
From the sounds of it the furlough in UK had a lot of people being home

Yes those furloughed were not permitted to do any work whatsoever for the Company they were furloughed from. This is one area where checks and investigations have been made and prosecutions are taking place where it has been found that companies were taking the government funds and still getting employees to work. However furloughed employees were allowed to work elsewhere whilst receiving 80% of their regular salary. I know several BA employees who signed up for track and trace and others who took on delivery driver jobs. I don't blame them as they knew they'd be stuck at home twiddling their thumbs.

@mrshoho

Yes those furloughed were not permitted to do any work whatsoever for the Company they were furloughed from. This is one area where checks and investigations have been made and prosecutions are taking place where it has been found that companies were taking the government funds and still getting employees to work. However furloughed employees were allowed to work elsewhere whilst receiving 80% of their regular salary. I know several BA employees who signed up for track and trace and others who took on delivery driver jobs. I don't blame them as they knew they'd be stuck at home twiddling their thumbs.

I read that as the government had failed to do the recommended pandemic economic preparations, they had to rush out the scheme. So it was badly designed, and too blanket. The German scheme is clearly more nuanced.

Strange, not like our government to be underprepared

@lattice neither can the state

[quote whereorwhere]@lattice neither can the state[/quote]
It appears the German state can, I thought a) that the 24 months gives an interesting time frame and b) I do wish we had a similar system of proper support for citizens.

As has been explained they get more money from taxes and also just because they are doing it doesn't mean that's the right thing to do. I am more than happy to pay extra tax to pay for furloughing up until now but I'm not prepared to subsidise people to do nothing for jobs that no longer exist

The furlough "all or nothing" scheme was another Treasury/HMRC cock up. Did they not think, even for a moment, that lots of firms would still be operating, but at lower levels, and that you needed a flexible way of bringing people back. It took them until July to bring in flexibility/part time furlough. The stupid "all or nothing" mistake is what caused so many businesses/organisations to shut down completely back in March rather than try to keep open at lower levels of operation.

@Kazzyhoward

Yes, when I saw the forecast cost of the German scheme it was lots lower than ours. It seems with a more focused scheme we could have helped those who needed it most perhaps.

As a taxpayer, I will suffer when 2m more jobs are lost. Will probably cost us more than subsidising in the end.

Central banks predict that the COVID recession will be V-shaped and comparatively brief.
So thousands of businesses and millions of jobs could be saved, with support

I live in Germany (I'm recently retired) and I think this support strategy is sensible because it helps both in the present and future,
a much better investment than paying unemployment benefit to millions more people for years.

Germany can afford it, after so many years of budget surpluses, e.g. nearly €60 billion last year

Merkel, who leads the moderate right of centre CDU, is noted here for normally being frugal

• although she has made annual investments in public services like education and health, which the main parties have always agreed to maintain to a high standard.

However, throughout the COVID emergency she has spent / invested:

With Kurzarbeit, most people continued working including during lockdown, except for hospitality & leisure sectors that were temporarily shut.

Those firms who used it, could spread out the reduced hours among all the employees,
rather than sending some home and keeping some ft
This is thought fairer and also reduced the number of WOH workers reluctant / frightened to return.

Kurzarbeit helped to keep down the rise in German unemployment to only 1.3% which is much lower than the recent increase in the UK

Since May, Merkel has made credit of €800 billion available for business, both for running expenses and investment for the future,
with more available, "whatever is necessary" if businesses needed this

Additionally in June, Merkel launched a huge stimulus package of over €100 billion to boost the economy,
which is given to both individuals and businesses
e.g.
. €300 per child
. VAT slashed for 6 months
. Compensation for businesses whose revenues have fallen below income,
. Grants to help the switch to a greener economy e.g. e-cars

I think that longterm this strategy will prove prudent and pay for itself, with faster and sustainable economic recovery

re public services and tax:

I prefer to pay a bit more tax in Germany for efficient public services, because paying for inefficient ones is poor value for money
Although, with the equivalent of council tax being about 10% of British rates, my total tax bill is not as much higher as one might think

This crisis has showed the importance of properly resourced public services - with local control - that could spring into action:

. A health service with massive spare capacity, that could treat patients as early as possible and also continue important non-COVID services
Rationing and postcode lottery have never been a part of the German system (which is expensive though)
This kept down deaths from COVID and also other deaths

. A public health service with tens of thousands of professional staff in local authorities who could spring into immediate action
and also enough "spare" in other public services that competent already vetted civil servants could be borrowed for the emergency

This included especially the local track & trace systems that from early on were essential in keeping down infections and deaths

@BigChocFrenzy

re public services and tax:

I prefer to pay a bit more tax in Germany for efficient public services, because paying for inefficient ones is poor value for money
Although, with the equivalent of council tax being about 10% of British rates, my total tax bill is not as much higher as one might think

This crisis has showed the importance of properly resourced public services - with local control - that could spring into action:

. A health service with massive spare capacity, that could treat patients as early as possible and also continue important non-COVID services
Rationing and postcode lottery have never been a part of the German system (which is expensive though)
This kept down deaths from COVID and also other deaths

. A public health service with tens of thousands of professional staff in local authorities who could spring into immediate action
and also enough "spare" in other public services that competent already vetted civil servants could be borrowed for the emergency

This included especially the local track & trace systems that from early on were essential in keeping down infections and deaths

Stop now BigChoc you are really rubbing it in 😬.

We in the UK have Dominc Cummings in charge and the scary part is no one really knows what his agenda is.

I think that longterm this strategy will prove prudent and pay for itself, with faster and sustainable economic recovery

I think this could be right, UK did so badly after 2010 and maybe going to repeat the mistake again.

But I don't believe Germany have anywhere near as much debt as the U.K. do, so they can probably afford to pay out for furlough for 24 months.