Corona-pandemic: What are the economic effects are to be expected?
The Corona-crisis has far-reaching consequences for the global, and thus also for the German economy. Recently published Eurostat Figures show that gross domestic product (GDP) fell in Germany in the first quarter of 2020 to 2.4 percent, although the consequences of the Corona-pandemic came in the second half of March in full. For the second quarter of a two-digit decline in the threat.
The Kiel Institute for the world economy (IfW Kiel) announces a 2.4 percent drop in the German GDP in the first quarter of 2020. This was the strongest drop since the financial crisis in the years 2007 and 2008. In a European comparison, the decline was even more moderate. In the second quarter are expected to be an even more significant decline.
Arrived in Germany in a European comparison, is mild of
According to the IfW, Kiel, Germany the fall has been relatively good. In France, GDP declined by 5.8 percent, in Italy by 4.7 percent, in Spain by 5.2%, Belgium 3.9% and Austria by 2.5 percent. The full extent was not expected until the second quarter.
Never has there been so much short-time working
“The Corona-crisis has hit the German labour market with full force, never before since the reunification, have reported more people in the next month unemployed. The companies have also displayed for about 10 million workers short-time working, the number of short-time workers will reach a never before recorded level,“ summarizes Dominik Groll, leading Analysst of the labour market at the IfW Kiel.
Burden is unfairly distributed
IfW-Kiel-President Gabriel Felbermayr holding the economic burden resulting from the suppression of Coronavirus, for unfairly distributed. Some economic sectors such as tourism and gastronomy unduly concerned by the measures. The resulting effects on the containment of the Coronavirus SARS-CoV-2 would benefit, but society as a whole.
Especially hard hit companies were heavily in debt to go out of the crisis, what inhibits, in turn, the growth and the recovery of these companies. Consequently, it must be according to Felbermayr for the economic policy in addition to the mitigation of the fair balancing of loads to the scale. “If there is no load balancing, attacked the capital of many companies, which could prove to be a heavy mortgage for a recovery after the crisis,” warns Felbermayr in a press release from the economic Institute.
Due to lack of sales, credit programs, subsidies and short-time work schemes, many companies could be saved while, at the same time the debt of the company increases, however. “If the company knew, now, that you remain at the end of not alone to the loads sitting, you could plan more confident and with greater safety for the future”, emphasized by Felbermayr. Only the already adopted liquidity assistance could unfold their full effect.
Proposal for a fairer distribution of the burden
The Kiel Institute for the world economy therefore proposes a load-balancing, in which the state pays for certain sectors, the resulting loss of income to a yet to be determined proportion. As a base year could be used income from the year 2019. Already received Corona-aid could be credited to the load balancing. So, the incentive remained to do business better.
The resulting additional costs could then be used in subsequent years under certain criteria with the tax collected. Thus, the load is distributed not to a few, but to all alike. (vb)