Angela Merkel to extend Germany’s furlough scheme to 24 months

Roughly 10.1 million workers have signed up to Kurzarbeit, or ‘short-work’ in English, since companies were forced to close in late March during a nationwide lockdown over the coronavirus.

Shops and firms have been able to re-open since late April following a drop in confirmed case numbers in the country and since July, furloughed staff have been permitted to return to work on a ‘part-time’ basis.

Now German politicians are going one step further to save their economy by extending their furlough scheme to 24 months.

A spokesperson for the chancellor said Merkel was ‘positively’ inclined to back the extension being proposed by Germany’s finance minister, Olaf Scholz.

Scholz suggested prolonging the scheme by another 12 months on Sunday, saying that the ‘corona crisis won’t suddenly disappear in the next few weeks’.

He added: ‘Businesses and employees need a clear signal from the government: we’ve got your back for the long haul in this crisis, so that no one is being let go without need.’

A final decision on an extension, which it is estimated will cost €10bn (£9bn), is expected on 25 August.

The UK’s furlough scheme is set to end on October and from August employers will have to start contributing towards its cost, first with pension and national insurance contributions, and with 10% and then 20% of wages in the next two months.

Britain’s scheme strictly forbids staff taking on any work while on furlough.

Germany’s furlough scheme is modelled on a programme that won the country praise during the 2008-09 financial crisis.

Companies can apply for Kurzarbeit if at least 10% of their workforce have had their working hours cut by more than 10%.

By the end of April 2020, German companies had signed up more than 10.1 million workers to the scheme – almost 10 times as many as at the peak of the financial crisis.