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Economist fears 600,000 job loss – DIW expects wave of bankruptcies
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Overburdened staff and hospitals threatened with bankruptcy
The German Hospital Society is sounding the alarm. Many hospitals are threatened with bankruptcy early next year due to the corona pandemic. In parallel, the staff goes on the gums.
By the end of 2021, the economy will return to its pre-corona pandemic level, says economist Gabriel Felbermayr. But he also sees problems in the later time for tourism and aviation. DIW Chairman Fratzscher expects an increase in corporate bankruptcies.
WAccording to economist Gabriel Felbermayr, around 600,000 jobs will be lost in Germany due to the corona pandemic. The worst affected areas are those that have already undergone structural changes, such as the aviation and tourism industries, said the director of the Kiel Institute for World Economy. “In a decarbonized world, aviation would have to shrink anyway. Corona anticipates a lot and is sustainable. “
The economist sees long-lasting consequences for tourism, which is important for Schleswig-Holstein and other coastal states. “Not everything will be fine there either,” Felbermayr said. “In private tourism, the rebound will be very clear: people want to go to the coasts and to the mountains.” In business tourism, however, there is a clear structural change. “There will be fewer flights and less congress tourism.” This is particularly true in city hotels. Instead, online communication is increasingly important.
“The pandemic will change the retail sector in the long term,” Felbermayr said. In the course of digitization, some sectors of the population bought online for the first time. They are currently seeing that credit card payments do not necessarily end in fraud and that the goods arrive undamaged. “Some of these reserves are likely to disappear. For retail in city centers and shopping malls, the crisis is not over, even if the infection does allow a return to the city center. “
In view of the aid announced by politicians, Felbermayr said that replacing lost sales could be suitable for the restaurant industry. “But if you replace retail sales, there is a risk of massive overcompensation. After all, retailers won’t even buy goods they can’t sell locked away. ” The aid is too generous for these companies, at least in the long term. “When the state helps companies, it is as fair as possible.”
The Kiel Institute expects gross domestic product to rise 3.1 percent this year. “If the pandemic subsides in the summer, the economy will reach its pre-crisis level in the fourth quarter of next year,” Felbermayr said. The normalization of the level of employment is expected a little later.
DIW Chairman Expects a Wave of Corporate Bankruptcies
The president of the German Institute for Economic Research (DIW), Marcel Fratzscher, expects an increase in corporate bankruptcies as a result of the Corona crisis. “The second wave will be tougher,” said Fratzscher of the “Augsburger Allgemeine.” “The later, the more companies are reaching the limit of their possibilities, the more they will go bankrupt.” The question is not “if a wave of corporate insolvencies will come, but when.”
According to the president of DIW, there is the threat of a wave of corporate bankruptcies, along with rising unemployment. However, it is okay to extend the lock. Also for the economy, the top priority should be to limit the second wave of infections as soon as possible: “Economic relaxation now may benefit some in the short term, but in the long term it would harm everyone.”
The DIW chief accused the politicians of not managing the crisis: Germany had not adequately prepared for the second corona wave. In schools, for example, the digital offer has not expanded enough. In addition, politicians reacted too late to the second wave: “If the federal and state governments had reacted to the second wave in early mid-October, we certainly could have saved lives and kept economic damage at bay,” Fratzscher said.
