German firms are conflicted about the Kurzarbeit furlough scheme

FOR THEIFO first time in its august history of more than 100 years, the Adlon, a glitzy hotel within sight of Berlin’s Brandenburg Gate, used , a scheme in which the German government pays the bulk of wages of people who temporarily stop working or work reduced hours. “Our business was almost completely gone,” explains Daniela Welter, the hotel’s head of personnel, referring to the hard lockdown imposed last November that banned hotel stays for leisure travellers. Thanks to , the Adlon was able to save the jobs of all its 347 staff. Today it is hiring again.dates back over a century and has been mimicked round the world during the covid-19 crisis. In Germany it has been stretched to unprecedented lengths. Whereas some 1.5m German workers at 56,000 firms were furloughed at the peak of the global financial crisis in May 2009, around 6m employees of 610,000 businesses took advantage of the scheme in April 2020, when lockdowns were at their strictest. Last month 2.3m people, or 7% of the German workforce, were still partially or fully furloughed, according to the Institute, a think-tank. The cost to the federal employment agency is €35bn ($42bn) and counting. In June Germany’s labour minister announced an extension of the scheme until the end of September.