The restart is timid but real in Germany. After four weeks of restrictions, small businesses can reopen in much of the country. This Thursday, the automaker Volkswagen is even relaunching part of its production, in Zwickau, in Saxony, where it produces its new electric model ID3.
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This timid easing will not, however, avoid a major crisis in the European economic engine. German growth could fall by 10% in the second quarter, and from 3.7% to 5.4% over the year, before becoming positive again in 2021. In addition to the shutdown of the national economy and a fall in domestic consumption, the world champion of exports suffers from the crisis in its main customers, China, the United States and the European market. “For an exporting nation like Germany, the economic weakening of its partners is very damaging”sums up the Leopoldina Scientific Academy which advises the government.
Insist on sustainable development
To limit immediate damage, Berlin has released € 1.2 trillion in aid to its economy, but what can be done in the medium and long term, to think of the after coronavirus? Will it be necessary to lower taxes to stimulate supply, reduce VAT to boost domestic consumption, impose a scrappage bonus to revive the automotive industry, or even launch a vast stimulus and investment plan? There are many ideas, but none are decided by the authorities.
→ ANALYSIS. Coronavirus: how Germany managed to manage the crisis
The idea of coupling any new measure to criteria of sustainable development, in terms of the environment, digital technology and research and development, on the other hand, is almost unanimous among economic institutes. “This is a historic opportunity to seize”, estimates the Leopoldina Academy.
“When the epidemic is under control, we will take new steps”
Is the German export-oriented economic system permanently weakened and should it be rethought? Yes, says the Friedrich-Ebert foundation, associated with the Social Democratic Party. “In a deglobalized world, there will no longer be room for an export champion”, predicts researcher Marc Saxer, who believes that “The European market will gain in importance for Germany”.
Without going so far, the Leopoldina Academy considers it essential that Berlin support its European neighbors. Olaf Scholz, the Minister of Finance, is also aware of this. “As an exporting nation, it is in our interest that we not only get back on our feet but also Europe”, he summed up. “When the epidemic is under control, we will take new steps”, he added, referring to the idea of a European recovery plan proposed by France.