The corona crisis has quickly paralyzed thousands of companies, entire industries have already been ordered to sleep, other companies will close after government aid has been approved. It is currently unclear how many companies will reawaken from this economic nightmare. “The German economy is currently experiencing a super meltdown” – this is the clear verdict of Smartbroker board member Thomas Soltau. The head of the new online broker points to interruptions in the global supply chains, bottlenecks in the supply companies, companies that have already been closed to the authorities, and sickness-related staff shortages across the country.
The state has already recognized this problem and has therefore announced massive aid to an unprecedented extent. The Federal Government has committed unlimited loans to companies affected by the Corona crisis. The state wants to help micro-entrepreneurs with 40 billion euros, system-relevant businesses are to be nationalized if necessary. Municipalities, federal states and the government are currently promising new measures almost every day. Last Saturday, for example, it said that an economic stabilization fund of 600 billion euros should be made available.
Economic stimulus programs do not help in the short term
The numbers know only one direction and that steeply upwards. Gabor Steingart therefore already mentally agreed the readers of his “Morning Briefing” (March 20, 2020) to tax increases. “It is clear that companies need help,” says Thomas Soltau. That is precisely why, in his opinion, one should think about the distribution of funds and the impact on the state budget. Among other things, Soltau criticizes the planned economic stimulus programs, as these do not wash the acutely threatened companies into the empty coffers in the short term. “Loans and loans make sense in principle, but they do not replace the missing sales in the current shutdown phase. And if the catering businesses are hopefully allowed to open again soon, people won’t come to the shop twice as often, ”says the Berliner. The costs keep going, argues the smart broker-Boss. This does not only include the wage costs, where there is relief from the short-time work allowance.
KfW loans will take much longer to pay out than expected
Soltau, who has been active in the capital investment and fund markets for 16 years, also has doubts about the implementation of the announced KfW emergency loans. “Processing takes far too long. Neither the banks nor KfW are prepared for such a rush of applications, “said the smart broker-Boss. Applications should first be processed by the house bank. Most of the banks would have had to save themselves in the past ten years, and loan processing took a long time even before the Corona crisis. “We are currently talking about up to 50 times the value of the usual application volume. Who should do it, ”asks Soltau, who has good contacts in the banking scene and is therefore well informed about current developments in the industry.
In addition, there are also staff shortages in the credit institutions as a result of the Corona Virus. Soltau: “We know from several discussions with banks that the applications are stacked on the tables several meters high. If an employee is then tested positive for Corona, you can send the whole department home and then the house of cards collapses. ”The recent announcement by the federal government that 90 percent of the credit risks will be taken on doesn’t help much either. “The banks will not be able to tackle the crisis alone,” emphasizes Soltau.
Smartbroker boss presents remarkable concept
The smart broker-Chef therefore proposes a new solution: “The tax offices should now reimburse the taxes of the past two years proportionately as quickly as possible – especially to small and medium-sized companies, the self-employed and craftsmen. The smart broker-Chef specifically targets trade tax and corporate tax with his draft. “The financial market expert bases his proposal on the time factor. Processing is faster than any loan application and requires fewer staff. “The partial reimbursement of the taxes already paid over the past two years gives the companies the liquidity they need to bridge this difficult phase,” says SmartbrokerChief Soltau. In his opinion, smaller companies and private individuals would also benefit from this regulation and would be “rewarded” for having financed the state through tax payments for years.
Show free-riders a barrier
With his idea, Soltau also wants to ensure a little more justice in the distribution of funds. “We hear from many banks that they and KfW are also concerned about excluding ‘free-riders’.” The smart broker– The executive board refers among other things to the now insolvent restaurant chain Vapiano. The company announced a few days ago that it would apply for “short-term” applications for financial support programs from various governments in Europe. If the company did not receive financial aid as soon as possible, 10,000 employees would be on the street. “For me, Vapiano is the ultimate negative example,” criticizes Soltau. The restaurant chain had been in economic difficulties for months, and last year it looked several times as if the company would soon have to close its shops.
Smaller companies and private individuals should also benefit
“We’re talking about taxpayers’ money. So we should also take a close look at who we are transferring millions of euros to, ”emphasizes Soltau. The reimbursement he proposed by the tax offices benefits precisely the companies, entrepreneurs and people who have previously paid something and previously also had a viable business model. “The idea is the quickest to implement and it prevents government aid from reaching companies whose balance sheet was made up of dark red numbers many months ago.”
The smart brokerChief continues: “Because the need is huge and resources are naturally limited, payments should end up where they are most effectively used. These are the companies, tradesmen and craftsmen who have always paid taxes. They have demonstrated that they can work profitably and have a viable business model under normal conditions. ”The Smartbroker believes that large companies that are generally very happy to accept government aid-Chefs also finance on the capital market via bonds and or share issues.
“Tax repayments are ideal for averting a deflationary shock and protecting threatened companies from bankruptcies. We are generally faced with a difficult balancing act in the Corona crisis, ”says financial market expert Soltau. “On the one hand, there is a risk that the state will react too slowly and do too little. At the same time, unbridled financial injections will lead to clearly noticeable inflation. It is all the more important that the financial injections end up where the highest productivity is and where goods and services are created for which there is high demand. “