The export figures are rising again, but are below the values of the previous year. That won't change anytime soon. The foreign trade association BGA also expects the corona crisis to have an impact in the coming year. At the same time, an extension of the anti-crisis measures is called for.
Despite growing business, the corona crisis will keep the export industry in suspense for longer, according to the BGA foreign trade association. "In the coming year we will still be very busy dealing with the consequences of the crisis," said BGA President-designate Anton Börner. The association did not dare to make an export forecast for the current year. "We drive on sight," said Börner.
Exports in June increased significantly compared to the previous month. Year-on-year, however, there was another minus. Börner pleaded for the extension of anti-crisis measures, for example the duration of the short-time work allowance – but at the original statutory level, the financial resources are not unlimited. It is currently available for up to 12 months.
"I would also advise to extend the suspension of the obligation to file for insolvency beyond the end of September," said the future BGA boss. "We must not aggravate the crisis with a wave of bankruptcies of actually healthy companies." Conversely, this should not lead to companies with no future prospects being dragged along.
"Lowering the VAT too short"
At the same time, Börner reiterated his call for an extension of the VAT reduction. "The reduction in VAT for six months is too short. We will see many pull-forward effects in the fall that we will then miss in the first quarter of 2021," said Börner. "I would have preferred a year or a year and a half, also because the switch to the lower rates cost the economy time and money." The federal government reduced the VAT rates on July 1 from 19 to 16 and from 7 to 5 percent. This measure to revive the economy is limited to the end of December.
Börner sees the rising euro rate with serenity. "We have already seen a much stronger euro." The stronger common currency, cheaper imports, and energy is currently extremely cheap, both of which reduce the production costs of German companies. "Overall, we can handle the stronger euro with ease."
On the other hand, he is worried about the supply chain law under discussion. It is intended to oblige German companies to comply with human rights and social standards in their supply chains. "We have to ensure that human rights are observed and implemented worldwide. It is not the company's job to enforce human rights, but the state," said Börner. He fears a "bureaucratic monster" should the project, which is controversial between the federal government and business, be implemented.
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