Chancellor Angela Merkel has announced that most stores in Germany will shut from Wednesday, along with schools and day care centers.

The new restrictions will be in effect until at least January 10 to help tackle the second wave of the coronavirus pandemic, which threatens to overwhelm the country's health system.

In a news conference that followed a meeting of federal and state leaders on Sunday, she said the country urgently needed to address the exponential rise in COVID-19 infections.

The decision is set to cause a major disruption for retailers, the education system and the public in the lead-up to the Christmas holidays.

What do the new restrictions consist of?

• All nonessential shops and services will close until January 10, including hairdressers which remained open under the current lockdown "lite."
• Schools are urged to send students home and continue lessons online, as well as extend the winter break until January 10.
• Day care centers will also close, but parents will be able to take paid holidays in order to look after their children.
• Employers are encouraged to allow employees to work from home.
• People will not be allowed to drink alcohol in public.
• Religious events in churches, synagogues and mosques may take place if they follow hygiene rules, but communal singing is not allowed.
• States still plan to ease stricter contact restrictions for December 24 to 26 so that close family members can spend Christmas together — a household may, during this time, invite up to four adults from other households but only from the immediate family, plus any number of children under 14.
• People may not purchase fireworks for New Year's Eve.

The chancellor also recommended that families who are planning to meet up should isolate for a week beforehand to be safe.

What do the new rules aim to achieve?

"The measures which we began on November 2 have not been enough," Merkel said in a statement after the meeting.

"The health system is under heavy strain and our aim has always been to avoid an overloading of the health care system," Merkel said.

The goal of the new measures is to bring down the infection rate so that authorities can carry out contact tracing once again — the high number of infections made contact tracing impossible.

An acceptable infection rate for this would be 50 cases per 100,000 residents. Although the government has agreed to impose the new measures until January 10, they may be further extended if the case numbers fail to come down.

On Sunday, Germany's Robert Koch Institute, which monitors infectious diseases, reported 20,200 new infections and 321 fatalities. The number is less than Friday's record of 29.875 cases.

Germany's intensive care unit capacity is also at a critical level, and doctors have warned that only 5% to 10% of intensive care beds are available in some parts of the country.

Harsher lockdown possible

Hans Brandt, a DW reporter in Berlin, explained the relevance of the speedy decision that the government and heads of Germany's 16 states made.

"It was somewhat surprising that they agreed so quickly," Brandt said. "The whole meeting took just over an hour. We have been used to these discussions between the central government and the regional leaders dragging on for hours and hours, often with acrimonious discussions."

Brandt described the shutting down of retail shops during the peak of Christmas shopping as "a very drastic measure."

He said the new rules did not equate to the harshest possible lockdown and people had some leeway.

"A stricter lockdown is still conceivable since there is no rule that people have to stay at home," Brandt said. "It's still only an appeal."

Brandt said Merkel had been pushing for a stricter lockdown for a while and would be satisfied with the decision.

Germany's finance minister, Olaf Scholz, who was also present at the meeting, promised financial support for businesses and individuals affected by the stricter measures.

It remains unclear how exactly the government would support businesses, Brandt said, "but we know that the volume will be somewhere between €10 and €12 billion ($12.1-14.5 billion) every month" for businesses and self-employed people who cannot work because of the restrictions.

"Companies, the self-employed and freelancers who are affected by closures from December 16, will receive financial support," according to a Twitter post by the Finance Ministry. "That means improved bridging aid — subsidies for fixed costs, better conditions and higher monthly grants up to a maximum of €500,000."