Opinion: Pandemic shutdowns will affect the German economy | Reviews | DW


Restaurateurs all over Germany are completely lost. Many of them have adhered to strict hygiene rules, spent money on patio heaters and ventilation systems, and put up tents to prepare for the fall and winter months, and now they will have to lock up for four weeks. No guests, no revenue, and what comes next is uncertain. It’s easy to understand the owners’ resentment, although their argument – that no one gets infected by visiting restaurants – seems a bit hypocritical. This argument is echoed by owners of cinemas and theaters, as well as railway and airline companies: Everywhere is apparently safe. But the coronavirus is spreading rapidly in Germany and the current second wave of infections has made it virtually impossible for health authorities to determine who contracted the virus where and when.

Germany is one of the largest economies in the world, but also a country where regional health authorities frequently use fax machines to send their data to the Robert Koch Institute (RKI), the German federal agency for control and disease prevention. (Note for younger readers: Fax machines, invented in 1843, are used to send documents over the analog telephone network.) Plus, contact tracing would certainly be much easier if the coronavirus tracking app could collect more of data. In a country that places the protection of private data above public health, however, this is not possible. Welcome to the digital age!

Read more: In May, the World Medical Association warned that Germany had “underestimated the risk to public health”

But back to the German economy. The government has also opened state coffers and promised fast, red tape-free relief: many small businesses affected by the new restrictions will receive up to 75% of their November 2019 income. profitable for many businesses in the hospitality sector, as it is reasonable to assume that, in the face of the dramatic increase in infection rates, German restaurants would have had fewer customers even without closure.

Henrik Böhme, Economics Editor of DW

The German Hotel and Restaurant Association has released figures suggesting that a third of businesses in Germany will face bankruptcy as a result of the new measures, but these should be taken with a pinch of salt. Credit bureau Crif Bürgel, which has investigated data on more than 57,000 catering businesses, estimates that 14% of them are currently at risk of insolvency. This means that there are still thousands of jobs hanging in the balance – for this reason government assistance is essential to save as many jobs in the industry as possible. The same goes for the cultural sector and the events sector as a whole.

Read more: WHO says health workers account for 10% of global coronavirus infections

This persistent pandemic

Even the closest observers offer only careful assessments of what the partial shutdown could mean for the German economy. Nobody knows what will happen because of the virus and what measures will be needed to save lives. One thing is clear, however: an incredible figure such as plus 8.2% (which denotes the record growth of the German economy in the third quarter, compared to the second quarter) will not be achieved in the near future.

Read more: In June, the World Health Organization warned that the pandemic was ‘not even close’ to being over

No one can predict whether people will continue to shop during the partial shutdown (i.e. consumer confidence will remain reasonably high), whether industries will be able to maintain production (i.e. whether construction sites will be safe for workers) and whether German companies will continue to be able to sell their products on export markets, as the pandemic is currently a source of serious concern in neighboring countries. Either way, experts currently see the danger that in the fourth quarter economic growth will come to a halt again. This means that during the year 2020, the country’s economy will probably contract by 5% or a little more. Sober, but not exactly catastrophic.

Global trend in the number of new cases of COVID-19

The pandemic continues to be a huge learning process for scientists and doctors, for politicians, for businesses, which must adapt, and for people, who must survive the pandemic. One thing, however, is abundantly clear: if we fail to bring the pandemic under control, there can be no economic recovery.


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