The losses inflicted on Europe's largest economy due to the coronavirus are enormous: Hundreds of thousands of businesses could be destroyed

The losses inflicted on Europe’s largest economy due to the coronavirus are enormous: Hundreds of thousands of businesses could be destroyed

According to an analysis by the Association of Municipalities and Municipalities (DStGB), the pandemic could accelerate the destruction of the city center, which until now has been mainly driven by the proliferation of shopping centers and the growing popularity of online retail. The The pre-pandemic situation that has emptied pedestrian streets in the city center for months will not be restored because more people have “recognized and reaped the benefits of shopping online.” Gerd Landsberg, executive director of an association of nearly 14,000 municipalities, told the Rheinische Post this weekend.

DStGB estimates that at least one hundred thousand stores could be destroyed by the end of the epidemic, which not only means that half a million jobs could be lost, but also that there will be more retail space waiting for tenants in the city center, he added.

The process should be stopped, the internal departments considered “business cards” of the municipalities must be renewed, and climate protection requirements must be applied in this business.

In areas that are already difficult to tolerate during hot and dry periods, more green space and water are needed to improve quality of life and strengthen other functions to offset the weakness of retail. Gerd Landsberg explained that more culture, fine arts, traditional “experimental gastronomy” and more housing are needed to revitalize municipal centers that have been hard hit by the epidemic.

Ventilator on the farm

The epidemic affects the entire German economy, but there is no wave of bankruptcies yet, on the contrary, the number of companies liquidated due to insolvency fell to the lowest level in twenty years last year – 16,300. However, this is mainly due to the publicly funded stabilization programs, in which the federal government has so far distributed around 140 billion euros (50,400 billion HUF) in aid. Highlighted in another analysis by one of the leading economic research institutes, IW (Kölner Institut der Deutschen Wirtschaft) in Cologne, for the Sunday newspaper Welt am Sonntag.

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The IW calculates that the German economy will produce 300 billion euros less in value due to the epidemic than it would have done had the new type of coronavirus (SARS-Cov-2) not emerged.

Most of the losses related to the so-called potential growth, 140 billion euros, were incurred between October of last year and March of this year. During this period, the second and third waves of the SARS-Cov-2 epidemic unfolded, so the restrictions that froze many sectors of the economy were also the most severe in these months.

Improve the epidemiological situation

Meanwhile, the epidemiological situation improved, with the incidence rate for seven days being the most important indicator – the number of infections per 100,000 people recorded in the previous seven days – at 64.50 on Sunday, compared to 83.10 per week, 118.60 the week and 165.50 a month earlier.

In most provinces, therefore, in recent days, restrictions have been loosened slightly, for example in the stands and garden areas of restaurants, which can only be visited with a full vaccination or a rapid new negative antigen test.. The revival of the vaccination campaign also contributed to a slowdown in the third wave. According to the latest federal government data on Friday, 39.9 percent of the population has received at least one dose of vaccine to protect against SARS Cov-2 (Covid-19).

Hence companies suffering from restrictions expect the summer to do well. However, it is not worth hoping that the coronavirus pandemic will not leave profound effects on the German economy, as IW President Michael Heather warned. “It will take years to compensate for the losses and structural distortions,” the specialist told Welt am Sonntag.

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Cover photo: Getty Images

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