FEDERAL CHANCELLOR MERKEL: Ladies and gentlemen, after reporting back by podcast, I wanted to make a personal appearance again today and to get back to you with a press conference, or at least a statement followed by questions, and to report both on the corona cabinet meeting and what is being discussed in Europe.
The corona cabinet met again today, as you know, and the ministers involved briefed us. I believe that we made important decisions, firstly on the fact that we also want to pursue national courses, that is, in agreement with Europe, as regards personal protective equipment and in particular the production of face masks. In view of the fact that this market is currently based in Asia, I think it is also important that we learn as an experience from this pandemic that we need a certain amount of sovereignty or at least a pillar of domestic production here too. That can be in Germany, but we will also try to coordinate this at European level. At any rate, we need capacities here.
The second point concerned entry to Germany. You will have seen that we already decided last week, in agreement with the Robert Koch Institute, on regulations for seasonal workers in Germany. Now we also need to guarantee freedom of travel for cross-border commuters and people who travel for work, but at the same time to ensure maximum health protection as regards the large number of people who may return to Germany. Over the course of this week, we will make decisions on this with the Länder, which are responsible for this matter.
One reason we need to do this is because the Robert Koch Institute will no longer define specific risk areas in the future. The way we and the RKI now see it, the coronavirus has occurred in 180 to 190 countries, so the world is a risk area. That is why these kinds of entry restrictions, that is, home quarantine, will also be necessary for people who enter Germany, regardless of where they travel from, with the exception of those – and this is what Germany is currently doing with France and other countries – travelling as commuters.
We also discussed how the procurement task force that has been set up in the Federal Ministry of Health will now work and how it will ensure supplies of face masks to the people who need them. We made progress on this topic, but not as much as we would have liked. That means we need to work hard so that hospitals, doctors, care facilities, centres for people with disabilities, and their staff actually have enough protective equipment and do not have to manage with what they have from one day to the next.
The fourth point concerned a modification to the existing KfW programme, that is, the Kreditanstalt für Wiederaufbau programme on the provision of loans. This was necessary because the programme we initially set up only assumed 90% of the risk to companies. It turned out that it is very complicated for many firms if the banks then have to provide a prognosis on their future. That is why we decided – and this has also been approved in principle by the European Commission – that there can be a 100% liability waiver, as Ministers Scholz and Altmaier informed you, for loans of up to three months’ turnover, up to 800,000 euros, and 500,000 euros for firms with up to 50 employees. Naturally, we have built in safety mechanisms here. A company must have been on the market since 1 January 2019 and must have been making a profit. The interest rates will be slightly higher than those in the first KfW loan programme.
All these are important measures.
We will discuss the issue of the domestic production of personal protective equipment at greater length and in more detail at Thursday’s corona cabinet meeting. We have said that the Federal Ministry for Economic Affairs and Energy, that is, Peter Altmaier, should be responsible for this. We will also set up a task force here that will deal exclusively with the issue of national or Europe-wide production so that we have secure access to this type of equipment.
As you know, the Eurogroup is meeting tomorrow, that is, it will hold a video conference. The European Council tasked the Eurogroup last week with making proposals on how we can address the crisis. I would like to take this opportunity to say that I believe the European Union is facing its greatest challenge since its foundation. There is no doubt about that. We face a great challenge in the field of public health. All European Union Member States are affected, albeit at different stages. This is a symmetrical shock, to put it in a rather technical way. That means everyone is equally affected by it. That is why it must be in everyone’s interest – this is Germany’s interest – that Europe emerges strong from this challenge.
It is important to understand that Germany – I have constantly reiterated this, including during previous crises, and it is all the more valid now – will only remain strong in the long term if Europe is strong. We only need to look at how our economies are interwoven and what happens when we do not have free movement of goods. That is why the answer can only be more Europe, a stronger Europe, and a Europe that works well in all of its components, that is, in all of its Member States.
Naturally, the countries that are even more interconnected by their common currency are particularly affected. This currency should be strong at the global level. That is why we also asked the Finance Ministers to make suggestions. The Federal Minister of Finance already told you about the three elements currently under discussion.
One element to tackle the crisis is the European Stability Mechanism, the ESM, which includes precautionary credit lines with low conditionality that make it possible to create security for everyone.
Under the European treaties, there is the option – this is contained in Article 122 of the EU treaties – of adopting special measures in the case of a natural disaster. I think we can say that the corona pandemic is similar to a natural disaster, so the European Commission can provide the Member States with loans.
I very much welcome the suggestion by Ursula van der Leyen on a major European effort, in particular to safeguard jobs, that is, to use labour-market policy instruments such as reduced hours compensation benefit. The Federal Republic of Germany has had very positive experiences with this type of benefit. Not all Member States are currently in a position to do this to the same extent. That is why an offer has been made to provide an instrument of this kind worth up to 100 billion euros – Germany would have to provide guarantees of seven billion euros – in order to ensure that jobs are not lost because of the shock to the business sector.
We will need to show that we are willing to defend and strengthen our Europe. After this severe blow to the economy, we will naturally need a recovery programme, a reconstruction programme, not only at national, but also at European level. Germany is willing to play its part in this.
We will explore the question of which strategic capabilities we need and want to have in Europe. We need to build up these capabilities in a very targeted way. At the same time, we must move ahead with digital transformation and do the right thing in climate protection, which has naturally not gone away as an issue.
These will be the decisions to be made once we have overcome the worst parts of this crisis in the health sector.
These are the things that will be important to me as regards the Finance Ministers’ meeting, tomorrow’s Eurogroup meeting. I am sure that we will discuss this again soon in the European Council. A date has not yet been set for that. It depends in part on the Finance Ministers’ talks.
That is what I wanted to tell you. I am happy to take your questions now.