Jena sends open letter on coronavirus economic aid

In an open letter, the city of Jena has contacted the state of Thuringia to point out shortcomings in the support provided to the event and cultural sector affected by closures and restrictions and to demand solutions.

Lord Mayor Thomas Nitzsche: "In addition to the epidemiological consequences, the state government's pandemic management must also focus to a much greater extent on the economic and social-infrastructural consequences of the pandemic and develop solution strategies."

The open letter in full:

Dear Mr. Prime Minister,
Dear Minister,
Dear Ministers,

The pandemic is now entering its third year and, despite vaccination options, we are back at the same point as at the beginning of 2021. From a municipal perspective, in addition to the epidemiological crisis, we are observing a growing economic crisis in our local and regional businesses in the catering, hotel, retail and event industries.
Since the beginning of the pandemic, these industries have been hit hardest by the necessary contact restrictions because the core of their business depends on people coming together, which cannot be the goal in a pandemic.
In 2020 and 2021, government economic aid has ensured that a wave of insolvencies has been avoided so far and that many of the companies still had sufficient strength and motivation in early summer 2021 to make a fresh start. The November and December aid in 2020 as well as the various conditions of the bridging aid and the short-time working allowance were of central importance here.
With the rise of the current fourth wave, this summer recovery has suffered a massive setback. The outlook for 2022 is not very optimistic in view of the continued lack of vaccination momentum and the still unclear assessability of Omikron. The main difference between the 2020/2021 lockdown phase and the current situation is that, with the exception of a few ordered closures, the majority of businesses remain open with 2G or 2Gplus. This basically positive opening requirement is increasingly becoming an economic threat for many companies. Why is this?

Many people in Thuringia are responsibly following the path of contact reduction and are currently not taking advantage of offers in restaurants and event venues. Day-to-day business in the catering sector has slumped by well over 50 percent.
Companies have stepped up their pandemic protection measures again. For this reason, almost all company Christmas parties in Thuringia have been canceled. Restaurants and catering companies have seen a 70 to 90 percent drop in sales.
After a summer and autumn of recovery, the hotel industry is once again struggling with a massive wave of cancellations and no sign of demand for the Christmas period or the turn of the year. This is affecting accommodation providers in cities in particular, with business tourism failing to materialize due to business travel restrictions and the cancellation of trade fairs, congresses and conferences. This trend can already be seen well into 2022. Unfortunately, we must also note that business tourism, in contrast to private tourism, has not picked up in the summer months. In the private leisure tourism sector, there may be a possible increase in demand for the Christmas holiday period under the current conditions, but it will be too short and too weak in terms of turnover to stabilize businesses outside of winter sports areas in the traditionally weak following months of January, February and March.
Event organizers have also experienced a massive wave of cancellations in recent weeks. Agencies have had to postpone or cancel productions because they cannot be produced profitably with the specified capacity reductions or because ticket contingents that have already been sold exceed the current capacity limits. B2B events have also been completely canceled. The staging of events in highly subsidized theaters and orchestras is commendable, but it masks the reality in the majority of privately managed or booked Thuringian event companies.
This winter's access restrictions mean that bricks-and-mortar retailers are continuing to lose out to online retailers. This affects owner-managed specialist retailers as well as chain stores with non-privileged product ranges. As a result of the necessary ban on Christmas markets, the number of visitors to city centers has also fallen massively. The same applies to the unfeasibility of open Sundays.
All sectors are struggling with a continuing exodus of staff, which is further exacerbated by the ongoing job insecurity. The effects of this staff exodus are being felt above all in product quality and the ability to operate in principle and will be the limiting factor in the event of an economic recovery.

All in all, the situation for companies and local authorities in Thuringia is dramatic and is further exacerbated by the fact that they are unable to close themselves. Self-closure helps a company to cope with periods of low turnover in normal times - from its own resources and by drawing on the reserves generated during periods of strong turnover. However, after almost two years of the pandemic, the equity base of many companies is now too weak to cope with this period of pandemic-related declines in sales over a period of several months without government support and only through their own efforts.

At the same time, companies that cease operations, at least temporarily, due to pandemic-related unprofitability currently have no access to the important instrument of bridging aid, and the federal government does not currently provide for the possibility of regulated self-closure as access to bridging aid.

The state government's current strategy of keeping facilities open de jure by massively reducing capacity and restricting access, while in fact ruling out economic operation, is not helping anyone in the sectors particularly affected. Moreover, due to the epidemiological consequences for Thuringia, this strategy will lead to an unforeseeable extension of the economic framework conditions that companies can no longer cope with.

We therefore fear a further massive weakening of the aforementioned sectors and, above all, a long-term weakening of the service sector in our cities and regions, which will have a long-term impact on the quality of life and experience in Thuringia.

Dear Minister President
Dear Minister
Ministers,

We expressly ask you to engage in talks with the Federal Ministry of Economics and Finance and the federal and state expert committees to advocate a corresponding adjustment of economic aid in order to enable companies to close themselves in a regulated and supported manner. This approach would give companies that have been particularly hard hit further prospects and at the same time give companies that are still producing profitably the opportunity to open up. In addition, Thuringia, as a federal state particularly affected by the fourth wave, may have to support industries whose existence would otherwise be acutely endangered with its own programs. Economic aid must also be made available to those companies and cultural institutions that voluntarily and often for economic reasons contribute to a further reduction in contact and thus to a stabilization of the pandemic situation by cancelling events and closing facilities.

In addition to the epidemiological consequences, the state government's pandemic management must also focus to a much greater extent on the economic and social-infrastructural consequences of the pandemic and develop solution strategies.
Otherwise, the diversity of Thuringia as a business location will continue to lose quality in the long term.

We, and certainly many other of our colleagues, will be happy to help you manage this process.

Yours sincerely

Dr. Thomas Nitzsche, Lord Mayor
Christian Gerlitz, Mayor

Distributor:
Thuringian State Chancellery - Minister Prof. Dr. Hoff
Thuringian Ministry of Labor, Social Affairs, Health, Women and Family - Minister Werner
Thuringian Ministry of Economics, Science and Digital Society - Minister Tiefensee