Why are images and Statues in church covered during Holy Week?

It is generally thought that this practice traces back to parts of Germany where there arose a tradition of completely covering the altar with a cloth during the Lenten season. This cloth kept the altar hidden until Holy Week during the reading of the Gospel that states the curtain of the temple was rent in two. This covering served a practical purpose of letting everyone know that it was Lent but also was a symbolic image of communal penance, being separated from the table of the Lord. Over time the covering of more images became a common practice and eventually was reduced from the entire Lenten season to just the last week or two.
In modern times this practice survives during Holy Week as a stark reminder of the importance of the week and as a way to keep us focused solely on the Passion of the Lord during the final week of Lent. Without the Paschal Mystery, none of the images are possible nor do they have any meaning.