Economy & Politics

Tough lockdown: risky step or clever future investment?

The so-called hard lockdown in Saxony has already begun. Numerous shops have had to close, only a few people are on the street.
The so-called hard lockdown in Saxony has already begun. Numerous shops have had to close, only a few people are on the street.imago images / Christian Grube

Now it’s coming, the real lockdown. From Wednesday, all shops except those for daily needs will have to close, schools and day-care centers should either be closed completely or the presence requirement suspended.

First complaintth representative des retail trades. “The fact that many retailers now have to close in the middle of the Christmas business, the time of the year with the highest turnover, hits the industry and the city centers hard, ”sayse Stefan Genth, Hauptmanaging director of the trade association HDE am Sonntag. Understandable, sAfter all, the Christmas business makes up a large part of the annual income.The HDE expected For all traders who are not active in the food trade, one Slump in sales from about 60 percent. The lockdown hits up to 600,000 employees in downtown retail, up to According to the HDE, 250,000 jobs could be lost.

Restaurants and hotels are also suffering from the lack of Christmas business.According to a survey by the hotel and restaurant association DEHOGA, they saw each other before the announcement of the tough Lockdowns The existence of 70 percent of the hospitality industry is at risk.

Bad start to the economy?

But how great is the economic damage through the measures for the whole economy? On the one hand, considerably enough that it causes a dent in the upswing. “In the end, I expect the lockdown will not only be extended to January 10th, but will affect much of the first quarter. Therefore, the gross domestic product is likely to decline again somewhat in the first quarter. Germany threatens an economic false start at the beginning of the year ”, said Commerzbank chief economist Jörg Krämer on Thursday the Reuters news agency.

On the other hand, the lockdown for Germany will probably be long termbe beneficial.Because it does not affect most industries and it could lead to a faster recovery for the entire economy.

Most industries are hardly affected

This is mainly due to the fact that Employees in the home office and in industrydo not get sick easily and keep working can. That’s much more important to them Value creation in Germany than retail. Whose Share of gross value added lay imyear 2018 was at just 3,5 Percent that from trade, Transport and hospitality addammenround 16 Percent. On the pproducing industries on the other handomitted 30 percent the gross value added. The rest also make up economic sectors that are only indirectly affected by the corona measures.

Als the Lockdown Light was extended into December, pointed out Torsten Schmidt from RWI – Leibniz Institute for Economic Research pointed to an important difference to the lockdown in spring: “At that time, large parts of the world economy went into lockdown at the same time, so that not only domestic demand but also demand from abroad collapsed,” said the economist. “This time you are large parts of the world economy – outside of Europe – are still in the recovery phase. “ Sectors such as mechanical engineering, which are less affected by the immediate measures in Germany than by the overall development of the global economy, benefit from this.

The state can afford the lockdown

Naturally means the lockdownthat also on the state additional costs will be incurred. Shopkeeperwho don’t to open can, and self-employed are provided by the government with bridging aid, Workers with Short-time work allowance, supported. Aid for November and December has a total volume of around 15 billion euros.

A.even if that is expensive, warnings like, “We cannot afford a second lockdown”, are not applicable. Thanks lowr interest on national debtand support from the ECBcould the German state also problem-free borrow more money. The question is another: is expensive, ein a short lockdown or a long-term sluggish economy with many infected people?

The renunciation of oneLockdown could eventually be higher costs have as a consequence. The number of I.infected increases daily strong, most recently by more than 16.000. Over Christmas they wouldInfected numbersprobably without the measures continue to rise, which not only pushes hospitals to their limitseAfter Christmas, people in many other industries would not be able to work, and children would not be able to go to school. School dropouts alone would later cost trillions due to the lower skills the children have acquired.

In Ireland, the strict lockdown has helped

Other countries have already shown what a temporary hard lockdown can do. This is what happened to Ireland at the end of October in view of the ever increasing infectionspay into lockdown: stores have been closed, Indoor meetings are prohibited, hairdressers and gyms have to close. Today Ireland is the country with the lowest infection rate of all EU countries. In the meantime, the measures have been relaxed again. That also lowers the economic costs compared to a much longer lasting lockdown light.

Nice before the minister On Sunday announced the new measures, have numerous economists therefore a tough lockdown called for – also in favor of the economy. “The biggest risk to economic recovery is one long lasting Wave of infection that creates even more uncertainty for companies, solo self-employed and Consumeuchers brings with it, ”wrote DIW President Fratzscher End of November.

The lockdown is an investment in the future

In economic terms, the lockdown can be viewed as an investment in the future, especially since it comes at a time when many employees are on vacation and children are on Christmas vacation. “The tough lockdown over Christmas is also economical right, because many companies and schools are closed over Christmas anyway. It can be understood as an investment. Without him there is a threat of an even harder and longer lockdown from mid-January. “, wrote the President of the Ifo Institute, ClementFuest, on twitter.

The only downer is that you might have been able to intervene earlier.
“Back then it was said that we couldn’t afford another lockdown – and now it is inevitable. It is devastating that Chancellor Angela Merkel was unable to prevail against the Prime Minister in October“, Said DIW President Marcel Fratzscher in an interview with Watson. “We could have planned some of the measures months ago and implemented them accordingly, for example organizing digital distance learning in schools. It is an indictment for Germany that that did not happen, ”saidhe.

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