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The longer the shutdown lasts, the more businesses will be constrained and the more they will be forced to file for bankruptcy.
Said Marcel Fratzscher, president of DIW (Deutschen Instituts für Wirtschaftsforschung) in Berlin, about what he expects from the German economy.
In an interview with Augsburger Allgemeine, which was surveyed by MTI, the director of the Institute for Economic Research explained that the second shortage would have more serious consequences than expected.
The question is not if there will be a wave of bankruptcies, but when
He said. Adding that bankruptcies will also increase unemployment.
Fratzscher does not expect much good, in his opinion the situation in the German labor market is more unfavorable than the statistics show.
Last year, about 600,000 employees who paid social security contributions lost their jobs. In addition, there are around 850,000 auxiliary employees who cannot claim unemployment benefits or part-time work benefits.
The two and a half million freelancers also suffered heavy losses.
In Germany, the number of daily deaths from the coronavirus epidemic reached a new peak before the new year. To curb the epidemic, a national shutdown was introduced in mid-December, freezing most areas of social and economic life. The Germans modestly passed the festive events, including New Year’s Eve, and this year they missed the street dances and family gatherings.
According to a joint decision by the federal government and the provincial governments responsible for epidemiological control, the restrictions will remain in effect until January 10, but the federal health minister, Jens Spahn, has already predicted that he will probably not return to life after 11.
The data indicates that the number of new infections will not be reduced enough by the deadline, so some of the restrictions will need to be extended, the minister explained.
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