We have often heard over the past weeks how Germany's impressive testing capacity has proven central to combating the coronavirus at such speed. But equally impressive is the speed at which its state and federal governments have reacted financially to save the economy. Like some of the UK's support schemes, Germany has provided various aid packages or Soforthilfe to businesses large and small. Unlike the UK, however, Germany has already managed to pay out billions of euros to those in need.
For the self-employed and small businesses with up to ten workers, this has essentially meant free money arriving in their bank accounts within 24 hours of applying, for which they complete only a short online form with their name and tax ID with hardly any further checks. Here in Berlin, that means the delivery of €5,000 (£4,400) – no questions asked – and up to anywhere between €9,000 to €15,000 (£7,900 to £13,200) for anyone with ongoing business costs. For a very small number, it was like winning the lottery. But for most freelancers, artists and businesses, it was a lifesaver.
By comparison, the UK's self-employed Income Support Scheme, which offers 80 per cent of one's income up to £2,500, won't be rolled out until mid-May. That's a long time to wait, especially for sole traders who have lost work but still incur high operating expenses.
At the heart of the German government response to coronavirus is a post-war spirit of solidarity. Quite sensibly, German ministers quickly realised that a shutdown of such epic proportion meant that everyone would be affected, no matter who they are or what they do, for a long time to come. So they calculated that there was little point making people prove their eligibility for grants through some huge bureaucratic procedure. Besides, those who might be tempted to play the system are all too aware that the Finanzamt will likely one day check whether they really needed that money.
Another comparison is the Job Retention Scheme, which was launched in the UK last month. So far, the application process seems to be meeting demand and payments are being made relatively swiftly. But it's worth noting that, in Germany, a similar system of Kurzarbeitergeld has already existed since 1957. It enables an effective reaction to looming job losses (with money arriving within two weeks and lasting up to 12 months) while offering employees the flexibility to continue working, which furloughed staff in the UK cannot.
Ironically, Germans are known as much for their bureaucracy as their efficiency, but coronavirus puts things in perspective. If we judge governmental bureaucracy by the efficiency of our civil service, the UK seems the more bureaucratic country because systems are not always properly in place and so policies (or pandemic plans) take longer to enact.
Over the last few weeks, we have heard British politicians asked why the UK cannot follow Germany's lead. The reason is not a lack of willingness, it's simply because the UK national government has many more responsibilities with far fewer possibilities for delegation.
This is partly down to the form of parliamentary government of the two countries. While Angela Merkel is praised for her calm-headed leadership during this crisis, we must also remember that she is at the behest of 16 federal state premiers, which means she actually has far less control over how her country reacts than we think. That is why, for example, we see the lockdown in Germany now eased (it seems to some) too early. At the same time, these state governments provide an extra layer of political cooperation, allowing decisions to be effectively delegated.
In contrast, Boris Johnson and his cabinet need only contend with three devolved governments while having to head the response for the whole of England, including the NHS. Although the Federal Ministry of Health in Germany does take responsibility for the control and prevention of infectious diseases such as Covid-19, it is still at the bidding of local state and municipal health authorities.
You might also be wondering how on earth Germany managed to dish out so much money for the aforementioned Soforthilfe to so many people so quickly. Well, that was the responsibility of the local investment banks of each state, not the national government, to filter through a mix of both state and national funding. It is a remarkable example of how the federal system of government can help speed things up when the various levels collaborate.
Of course, this doesn't take away from the important need for national leadership in such a crisis, as the absence and return of Boris Johnson reminds us all. Not only must major decisions be made but the public also looks to a figurehead and councillor in these times. Angela Merkel – with her background in science – has also proved to be a highly effective chief adviser to her nation. Covid-19 is forcing us to reassess how decisions of national importance are taken and implemented.