[ad_1]
Epidemiologists have been right, the coronavirus insists, the government has underestimated the risk and will be forced to launch a new support package, according to the German Institute for Economic Research.
Forecasts for German entrepreneurship do not inspire optimism for the new year. In fact, quite the opposite. Marcel Fratcher, director of the DIW Institute for Economic Research, estimates that the pandemic crisis will leave unharmed German businessmen or those who manage to get out of the strict lockdown measures, which will probably extend beyond January 10.
By 2021, the German government has decided to fall back on a new debt record of € 180 billion, but even this amount is not enough to keep companies alive and secure jobs. The institute estimates that the coronavirus crisis will cost around € 400 billion.
“We underestimate the second wave of the pandemic”
This brutal amount does not correspond to the somewhat optimistic scenarios of government officials for a relative warming of the German economy in the coming months. What went wrong? “We just underestimate how strong the second wave of the pandemic is,” said Marcel Fratzer.
“And I’m afraid we remain overly optimistic about 2021, because we don’t realize that many entrepreneurs are of last resort, have no other reservations, and face the specter of bankruptcy. We do not realize that unemployment is increasing again and that the world economy is not progressing at the rate we wanted. “The risk remains enormous and I fear that we will have to prepare for the possibility that the economy will continue to contract as long as it is necessary to control the second wave of the pandemic.”
The scenario described by the German economist is terrifying, because he describes as inevitable what the German government is trying to avoid: the huge economic and social costs of a possible business lockout that will lead to rising unemployment.
“They will not reach 180,000 million euros”
“Yes, the wave of bankruptcies is perhaps inevitable. The question is not if it will come, but when, because the State has taken two measures this year: First, it has abolished for this year the mandatory bankruptcy request to the Attorney General Instance, which the entrepreneur had to file in a few weeks. And secondly, the state actively supported not all, but many entrepreneurs. These two factors have stopped bankruptcies, perhaps even leading to their reduction in 2020. This shows that still we have a long way to go. The question is when. “
Marcel Fraser thinks that in case strict containment measures continue until February or March, the € 180 billion package will not be enough to cover financial losses. The government will be forced to reach further into its pocket. “I don’t worry, the state has the resources, if it is going to ensure employment and business viability, it will be amounts that have been properly invested.”
With information from Deutsche Welle
Follow LiFO.gr on Google News and be the first to know all the news
See the latest news from Greece and the world, on LiFO.gr
[ad_2]
