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Germany's economy on quarantine
Material posted: Publication date: 04-04-2020
Being the fourth largest economy in the world, Germany is the most important economically developed state, as well as the biggest strategic partner of many countries. In the current environment fast and aggressive spreading of the pandemic coronavirus (SARS-CoV-2), which covered citizens from more than 150 countries, it is impossible to deny not only the slow development of economic relations within countries and between States, but also inhibited economic growth.

To trace changes in the economic sphere of Germany against the background of the pandemic COVID-2019, consider one of the main economic indicators such as GDP (it. Bruttoinlandsprodukt). For 2019, the gross domestic product of Germany is 4040 billion$ in 2018, the figure was 3997 billion$ by 2017 – 3618 bn $. Thus, it is possible to notice that Germany's economy is not static but evolves in a familiar way. Economic system of Germany is a socially-oriented market system, where free competition prevails enterprises. Germany is considered a prosperous state due to its developed industry, which includes mechanical engineering, automotive industry, successful chemical companies. Also the Germans were actively exported and imported products, allowing them to trade freely on the world market. It is worth noting that the unemployment rate in Germany is consistently low, and in General terms a stable economic situation the government is easily able to vary and calculate possible risks.

In 2003, in Germany there have been isolated cases of SARS, caused by a virus, however, further spread of the disease was identified.

At the moment, specialists have seen that Germany was the most prepared country in Europe. German authorities initially (before the application of the who) is very responsible approach to the problem of the spread of virus and disease at an early stage began to introduce drastic measures (in addition to the termination of air links with other countries, close, gardens, schools and universities, various public places, etc.):

  • informing the population about the risks of the disease, about how everyone can protect themselves, and the importance of disseminating this information;
  • preparation of hospitals to a large influx of patients;
  • training of health personnel and to protect it from infection;
  • help each other and care about each other.

A German citizen is responsible and disciplined. Therefore the authorities have no problem with the explanation of the precautions that she enters. People understand, which introduced certain measures and responsible approach to compliance.

However, the total number of people infected with coronavirus in Germany today is 77 981 people, and the number of deaths from coronavirus, 931.

German economists and specialists from other countries are beginning to sound the alarm and declare with one voice that macroeconomics will not be able to avoid a recession; they fear that the damage from it will be much more than from pandemic coronavirus.

According to estimates of the German economic Institute ifo only three months of limited economic activities associated with the quarantine measures, Germany risks losing more than 700 billion euros. To avoid paralysis of the entire economy, the government together with the Parliament approved the bailout package of 156 billion euros. Whether this will be enough to prevent a protracted recession in the economy and to keep afloat the small and medium business? The question remains open...

Some experts even propose to begin to implement a strategy to resolve the lockdown. They believe that by allowing the owners of Department stores, car showrooms and restaurants to open their doors to consumers, but at the same time obliging them to ensure that the distance between the customers in the 1.5-2 meters, will help thereby small and medium-sized businesses to keep your business. However, the response of such ideas, the government has not received. The Vice-Chancellor and Finance Minister Olaf Scholz did call plans to ensure business by increasing the threat to people "cynical".

Optimists hope that a quick recession would entail a rapid recovery, whereas a prolonged recession will lead to the impoverishment of the population, the difficulty of tax payments, unemployment, depression, etc. But even in that case, if Germany will be able to quickly eliminate the negative economic consequences of a pandemic, there is no guarantee that trading partners Germany will be able to cope with the crisis. In this case, German manufacturers will cease to be exporters and, like their foreign colleagues, will suffer losses.

Thus, we considered the current economic situation in Germany and can conclude that the timely response of the state to the aggression of a global pandemic is not a guarantee that the economy will remain unaffected. Whatever measures are introduced the government, as it was not ready population, but even one of the world's leading economies are not immune from paralysis.

Vlad Zhivotova

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