Germany’s Economy Simply Cannot Afford Another Lockdown
What the country needs now is more targeted measures and clearer priorities from its politicians, as well as more effective communication.
BERLIN — "We certainly wouldn't survive a total lockdown again."
The grim warning doesn't come from someone whose profits have taken a significant hit during the coronavirus crisis. Quite the opposite: Joe Kaeser, head of Siemens, has emerged from the first wave of COVID-19 infections "almost unscathed," with the Munich-based company even increasing its market share during the pandemic.
So if he sounds so pessimistic, imagine what hard-hit industries have to say about the prospect of a second lockdown then? For example, the metal industry and the airlines ... What about the small businesses without significant cash reserves? What about the start-ups, for whom calls from investors have suddenly dried up?
Many economic indicators show that the country is recovering quickly after the initial crash: Incoming orders are growing, and the business climate index for small and medium-sized companies is improving. However, it would be easy to underestimate how precarious the economic situation still is. If the economy doesn't keep on stabilizing, we could see bankruptcies and redundancies on an unprecedented scale.
What about the start-ups whose calls from investors have suddenly dried up?
All of which means that Kaeser is right: There's no use performing a surgical operation if the patient is dead. Minimizing the health risks as much as possible without taking into account the costs for the economy is not a viable political option.
German citizens queuing at a socially-safe distance — Photo: Sachelle Babbar/ZUMA
If Germany does experience a second wave of infections soon, it must avoid the blanket lockdown that was in force through March and April. Instead, the government should introduce new, more intelligent measures, which take into account what we have learnt over the past few months. For example, Germany has succeeded in protecting older citizens, who are at particularly high risk from the virus. In the week before Easter, some 25% of all the infected were people over 70 years old. Now it is only 7%.
That is a significant reason why the coronavirus mortality rate in Germany has been three times lower than the EU average — and almost 50 times lower than in the U.S. If there is a second wave, senior citizens and other high-risk groups could be protected in a more targeted way so that the rest of society does not have to face such harsh restrictions.
We could see bankruptcies and redundancies on an unprecedented scale.
The German government must also re-evaluate its priorities. We can't have another situation where nurseries and schools are the first to close and the last to reopen. And finally, the authorities must communicate more clearly. So far, with a few exceptions, the government and the German center for disease control didn't need to do much to convince citizens to abide by the regulations. But this work is now more urgent than ever, as people are growing tired of social distancing and opinions are becoming more entrenched.
In the past, the German government managed to push through unpopular decisions (joining the euro, avoiding a Greek exit from the single currency through offering billions of euros of loans and welcoming hundreds of thousands of refugees into the country) even when a significant minority of citizens were unhappy with these developments. But the efforts to combat the coronavirus would be significantly undermined if the measures were met with widespread opposition. Politicians love to talk about getting the people on board. They now have an unprecedented opportunity to do so.