BERLIN (Reuters) – Germany expects a record 2.15 million people to this year make use of a scheme that allows employees to work shorter hours but keep their jobs, as the impact of the coronavirus causes havoc in the labor market, a ministry document seen by Reuters showed on Thursday.
Under the initiative, first used in the 2008 financial crisis but now extended again to help cushion the blow from the coronavirus, companies can apply for state aid to cover the costs of keeping people on.
Germany expects the short-time work scheme, known as Kurzarbeit, to cost the labor office roughly 10 billion euros ($10.8 billion), the draft regulation from the labor ministry showed.
The Federal Labour Office has accumulated record-high financial reserves of roughly 26 billion euros, which can be used to finance Kurzarbeit state aid.
Business daily Handelsblatt had earlier reported that Germany expected nearly 2.2 million people to go onto shorter hours, including 1.15 million due to the coronavirus.
(Reporting by Holger Hansen; Writing by Madeline Chambers; Editing by Michael Nienaber)