German Firms Sought Shorter Hours For 11.7 Mn Workers In March-May

The coronavirus crisis prompted German firms to seek government-backed shorter hours schemes for a total of 11.7 million workers since March, official data showed Wednesday

Frankfurt am Main, (UrduPoint / Pakistan Point News - 3rd Jun, 2020 ) :The coronavirus crisis prompted German firms to seek government-backed shorter hours schemes for a total of 11.7 million workers since March, official data showed Wednesday.

Meanwhile the unemployment rate rose to 6.3 percent in May, the equivalent of some 2.8 million people, from 5.8 percent in April, the BA Federal labour agency said.

Before the coronavirus outbreak, German unemployment had held steady at around 5.0 percent since August 2018, as Europe's top economy enjoyed the end of a post-financial crisis boom.

Now, "the labour market remains under intense pressure because of the corona pandemic" and "shorter hours schemes have significantly exceeded the level seen in the 2009 crisis," BA chief Detlef Scheele said in a statement.

"Companies' demand for employees remains on a downward trend, but is no longer in freefall," he added.

The data on Wednesday showed that companies had applied for 11.7 million workers to be placed on shorter hours between March and May.

Under the scheme -- known in German as "Kurzarbeit" and widely copied abroad since the success of such schemes after the financial crisis of 2008 -- the government makes up for the workers' shortfall in pay.

But in terms of actual payouts, the agency has only compiled data for March so far, during which just over two million in fact paid under the scheme.

The shorter hours scheme is part of a trillion-euro ($1.1 trillion) economic support package decided as the pandemic broke over the country in March.

This week, Chancellor Angela Merkel's coalition government is hammering out details of a post-coronavirus relaunch plan expected to offer tens of billions of Euros of new cash.