Germany will go into a partial lockdown from Wednesday with non-essential shops and schools to close, as Europe’s biggest economy battles to halt an “exponential growth” in coronavirus infections.

The new curbs will apply until January 10, with companies also urged to allow employees to work from home or offer extended company holidays, under the new measures agreed by Chancellor Angela Merkel with regional leaders of Germany’s 16 states on Sunday.

“That would help to implement the principle ‘we’re staying at home’,” according to the policy paper agreed by Merkel and state premiers.

Germans are urged to limit their social contacts to another household, with a maximum of five people excluding children under 14 meeting at each time.

From Christmas Eve to Boxing Day, the contacts would be eased to allow gatherings with another four people excluding children, but who should be limited to close relatives or partners.

Germany in November closed leisure and cultural facilities and banned indoor dining in restaurants.

The measures had helped to halt rapid growth of infections after the autumn school holidays, but numbers had plateaued at a high rate.

Merkel had repeatedly pushed for tougher curbs to break the chain of contagion, but implementation of the rules is in the hands of individual states and some were reluctant to impose more curbs.

The mood however has changed in the last week after Germany recorded new daily death tolls reaching close to 600 and as the country’s disease control agency RKI reported that the infections trend had taken a worrying turn.

“Today is not the day to look back or to see what could have been, rather, today is the day to do what is necessary,” said Merkel, pointing to “very high numbers of deaths” and stressing the urgent need for action.

“The corona situation is out of control,” said Bavarian state premier Markus Soeder, pledging to implement the tougher restrictions in his state.

‘Last Christmas?’

Germany has imposed far less stringent shutdown rules than other major European nations after coming through the first wave of the pandemic relatively unscathed.

But Europe’s biggest economy has been severely hit by a second wave with daily new infections more than three times that of the peak in the spring.

Germany recorded another 20,200 new COVID cases over the past 24 hours, reaching a total of 1,320,716 cases, according to RKI data published Sunday.

Another 321 patients died from the disease from a day earlier, bringing the total death toll to 21,787.

“With increasing mobility and the resulting associated contacts in the pre-Christmas period, Germany is now in exponential growth of infections numbers,” said the policy paper agreed by regional leaders and Merkel.

While hospitals in some regions are warning that their intensive care units are reaching capacity, huge queues of shoppers were building downtown ahead of the festive period.

The chancellor had also voiced consternation at groups of people gathering for drinks at mulled wine stands set up by restaurants as a substitute of the popular Christmas market fare.

From Wednesday too, alcohol sales will be banned in public places as part of the new package of measures, essentially outlawing such stands.

The Federation of Retailers HDE warned that the new restrictions could threaten almost one in two jobs in the industry.

But Finance Minister Olaf Scholz said the government will offer help of up to 11 billion euros a month to help companies weather the storm.

In a hard-hitting speech before the Bundestag on Wednesday, Merkel issued a stark warning ahead of the festive season when families are expected to gather.

“If we have too many contacts before Christmas and it ends up being the last Christmas with the grandparents, then we’d really have failed,” she said.

Merkel’s government has repeatedly said that new infections must be brought down to 50 per 100,000 people, but the rate is currently at 169.1 per 100,000.

Ahead of the talks, Germany’s hardest hit states had already ordered new measures.

Saxony state, where in some areas incidence rates have hit 500 per 100,000 people, will shutter shops and schools from Monday.

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