Friday, December 03, 2021
Consequences of the Corona resolutions
“This brings the recession a little closer”
For many companies, the new resolutions of the federal and state governments mean above all more effort and higher costs with low income, warns the DIHK. As more and more customers stay away, one economist sees the recession approaching.
In view of the high number of new infections, the federal and state governments have tightened their measures in the fight against the corona crisis. Nationwide, the 2G rule is to apply in retail in the future, in which only those who have been vaccinated or recovered should be allowed access to shops. Shops for daily needs such as groceries, pharmacies and drug stores are excluded. “This brings us a little closer to the recession”, ING’s chief economist assesses the situation. In the past few weeks, retail, event and hospitality activities have already declined significantly due to the new incidences and uncertainties. That is only increasing now. “Despite everything, these measures will have significantly fewer negative consequences than the 2020 lockdowns.”
For the German Chamber of Commerce and Industry (DIHK), the far-reaching measures are an “important signal” that the resolutions will prevent a new lockdown for most of the economy, said DIHK President Peter Adrian of the “Rheinische Post”. For many entrepreneurs, however, they also mean more effort and higher costs with lower income.
“Where 2G is already in place in retail and catering, smaller businesses in particular are reporting that customers are missing and that there are practical implementation problems, also because checking the vaccination certificates ties up a lot of staff,” Adrian continued. The vaccination and test rules would also “dampen customer frequency, especially in the consumer sector”.
Billions in losses in retail and hospitality
The extension of the Corona economic aid is therefore a logical and important decision. Showmen and market traders in particular now need help quickly. “Many are currently losing a large part of their annual sales.” The Federal Ministry of Economics announced on Thursday evening that the conditions for bridging aid IV are in place, according to which the Corona economic aid should be extended until the end of March 2022. The current aid for companies damaged by the pandemic will apply until the end of the year.
The Institut der Deutschen Wirtschaft (IW) also assumes that comprehensive application of the 2G rule would lead to billions in losses in retail and hospitality. “We are assuming that 2G would lead to sales losses of around 5.3 billion euros in stationary retail in December,” said IW expert Christian Rusche.
The situation is also “precarious” in the catering and hotel industries. A nationwide introduction of 2G will affect the companies for the second year in a row during the important Christmas business. “There is much to suggest that numerous owners would consider whether it is still worth opening the business,” Rusche continued.
Which companies can save themselves after the fourth wave?
In the catering and hotel industry, according to IW calculations, an introduction of the 2G rule in December would lead to additional losses of around one billion euros. In addition, the companies incur expenses for admission controls. In the hospitality industry, too, it is therefore questionable whether entrepreneurs will then leave their businesses open in the winter months. In general, the question arises as to which companies could save themselves from the fourth wave of the pandemic.
According to Commerzbank chief economist Jörg Krämer, restaurants, hotels, pubs and other service providers are facing difficult times. He therefore expects more than ever that the German economy will shrink in the winter half-year. “This is why growth of only three percent is likely for the entire year 2022, although the economy should recover quickly from early summer after the Corona has subsided.”