Economists against extension of short-time work benefits

Photo: steel production (via dts news agency)
Photo: steel production (via dts news agency)

Berlin (dts news agency) – Leading economists have criticized the coalition plans to extend the period of short-time work benefits. “In my opinion it is too early for this decision,” said the head of the Munich Ifo Institute for Economic Research, Clemens Fuest, of the “Rheinische Post”. In principle, short-time work has the advantage of avoiding redundant layoffs, but the disadvantage of delaying necessary structural change, says Fuest.

“It is currently unclear whether the corona crisis will lead to companies with a viable business model being restricted in their activities even twelve months after it broke out. One should wait for the development in autumn before deciding on an extension.” The President of the Leibniz Institute RWI in Essen, Christoph Schmidt, directly rejected the extension.

“I do not think it makes sense to provide for an extension that will extend into 2022. Especially since we currently expect that the economy will largely recover by the end of next year,” Schmidt told the newspaper.