Berlin The corona lockdown in Germany is to be extended until the end of January. According to information from negotiating circles, the federal government and most of the states agreed on this line, the final decision will be made by Chancellor Angela Merkel (CDU) and the prime ministers tomorrow, Tuesday.
The extension of the lockdown will delay the economic recovery, said Ifo boss Clemens Fuest. Whether Germany slips into a recession again depends heavily on whether the recovery of the industrial sector, which has been intact so far, continues: “A prolonged closure of large parts of the retail sector will at some point also have an impact on the demand for industrial goods.”
Federal Health Minister Jens Spahn (CDU) apparently considers larger opening steps to be possible if the particularly vulnerable age group of over 70-year-olds is vaccinated. After this “decisive intermediate stage goal”, the burden in the health system will be different, he said, according to information from the Handelsblatt, this Monday at a closed session of the health committee in the Bundestag. This point will be reached “well before summer”.
The federal government is under political pressure to speed up vaccinations. Experts are currently discussing various options to achieve this goal.
Almost nine out of ten people who died from or with the coronavirus in Germany were 70 years or older. According to the Robert Koch Institute (RKI), the median age is 84 years. A large part of the approximately 35,000 corona deaths so far lived in nursing homes. In his vaccination ordinance, Spahn had stipulated that people over 80 and residents of nursing homes should receive protection first. A second group with high vaccination priority are seniors over 70 years of age.
In the government coalition, too, the question is now being asked of how much lockdown will still be acceptable if the population at the greatest risk has been vaccinated.
So far, the guard rail of German pandemic policy has been the number of new infections reported within seven days; it should at least fall below the value of 50 per 100,000 inhabitants. It is unclear how long it will take to push the value below this threshold – and whether this will even be possible in the cold season.
“In the debate about the right strategy, the impact of vaccination of risk groups on the restriction of freedom rights and the restrictive measures is neglected,” said the CDU member of the Bundestag and health politician Michael Hennrich the Handelsblatt.
“If the residents and employees in the care facilities are vaccinated, and if we make progress with the vaccination of the medical staff in the hospitals, this of course also means that the number of severe cases and the associated intensive care treatments in the hospitals will be reduced . ”
However, the restrictions are justified precisely with the overloading of the hospitals. Admittedly, distance rules and the wearing of everyday masks would certainly still have to apply “well into summer”, and large public events would also remain difficult. “When we are through with the vaccination of the group for over 70 years, I do not consider a large-scale closure of hotels, restaurants, retail and similar establishments to be justified,” said Hennrich.
It is difficult to foresee when the time will come. Spahn recently said that all residents of nursing homes should be vaccinated by the end of January. However, many seniors live in their own four walls.
According to the Standing Vaccination Commission at the RKI, 5.4 million over 80-year-olds and another 7.7 million people between 70 and 80 years of age would have to be vaccinated. It is also crucial how quickly further vaccines will be approved in the European Union and whether Germany can increase the number of available vaccine doses.
In any case, the republic will continue to stand still in many areas over the next few weeks. In view of the still high number of infections, there had been no doubts for days that the measures, which were tightened in mid-December, would be extended beyond January 10.
The new provisional end date for the lockdown, which Merkel and the prime ministers are likely to commit on Tuesday, is January 31. “Unfortunately we don’t have the numbers we need yet,” said the Rhineland-Palatinate Prime Minister Malu Dreyer (SPD).
After the holidays at Christmas and the turn of the year, there is currently little clarity about the development of the number of infections. Dreyer: “At the moment, we cannot really assess what the situation is like, also because less has been tested.”
Relapse into recession
The German Trade Association (HDE) called for improvements to state financial aid for the industry in view of the looming extension of the lockdown. “The dealers now urgently need tailor-made and fast government aid in order to be able to survive this difficult time,” said HDE General Manager Stefan Genth to the Handelsblatt.
The trade does not receive the same support as the gastronomy. “There has to be readjustment, not necessarily in terms of volume, but definitely in terms of accuracy,” warned Genth. “The upper limits on sales exclude retail companies from effective assistance that urgently need support.”
The situation is already dramatic for many retailers, especially in the fashion trade. “Many face the ruins of their very existence,” said Genth. The corona crisis with two lockdowns and a huge drop in customer numbers in many inner cities could mean the end of up to 50,000 stores with around 250,000 employees.
Verdi also considers the bridging aid currently planned in retail to be insufficient. The continuation of the corona measures is inevitable in view of the tense situation in the health care system, said trade union leader Frank Werneke to the Handelsblatt. “However, hundreds of thousands of retail workers and companies in the industry must not be left alone with the consequences.”
In view of the expected loss of sales of up to 14 billion euros in January in the affected areas of the retail trade, the cap on subsidies for individual companies to a maximum of 500,000 euros completely misses the realities.
DIW: Germany in another recession
From the point of view of the branch union NGG, the situation in the hospitality industry is dramatic – and the desperation grows with every day in the lockdown. For employers, rescue packages are rightly put in place, but hundreds of thousands of employees have been standing in the rain for months, NGG boss Guido Zeitler told the Handelsblatt: “Their wages are often far too low anyway – the even lower short-time allowance is not enough back and forth.”
The union calls for immediate Corona emergency aid for hospitality workers on short-time work of 1,000 euros and the examination of a minimum short-time allowance of 1,200 euros. In addition, Corona economic aid should only flow to companies that do not issue dismissals, but apply for short-time work benefits.
Due to the severity of the second wave of infections, the German Institute for Economic Research (DIW) no longer expects 5.2 percent growth this year, but only 3.5 percent. For DIW boss Marcel Fratzscher, the German economy is already in another recession: “After a shrinking fourth quarter, we expect an economic slump of more than two percent in the first quarter of 2021.”
The hope of an economic restart then lies in the second quarter. However, this will only succeed if the wave of infections subsides by February and the restrictions can then be largely lifted. Fratzscher: “If this does not succeed, the economy in Germany could suffer even longer and the risk of corporate insolvencies and unemployment significantly increase.”
Gabriel Felbermayr, President of the Kiel Institute for the World Economy (IfW), also sees the German economy “technically” already in a recession. As long as industrial production and construction continue to develop positively, the slump will not come close to that of spring 2020. For the remainder of the year, the IfW is still expecting positive economic growth – “with continued enormous uncertainty”.
With the currently still very high number of infections in many regions of Germany, it is difficult to believe in extensive easing in February. “At best, partial easing, for example in retail, can be expected.”
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