News Digest 10th April

Corona crisis

By Monday, the number of confirmed infections had hit 100,000, with 1,600 deaths; by Friday morning this had risen to over 118,000 cases, with 2,500 deaths (2.1%). The doubling rate passed 12 days – the figure at which the government said they would discuss easing restrictions on daily life.

Although the rate of infections has slowed down, the head of the Chancellery Helge Braun warned on Sunday that the time of highest rate of infections was yet to come.

The health system continued to cope. At the beginning of the week, Berlin still had 50% of its intensive bed capacity free and on Wednesday Health Minister Jens Spahn said that there were 10,000 intensive beds free nationally. On Thursday it was reported that Germany is sending 60 mobile ventilators to the UK.

There have been many reports on why the German mortality rate is so much lower than in other countries. A very comprehensive review of this can be found in the New York Times, which contains interesting information about how the authorities prepared for the crisis as early as January, as well as how intensive testing means people can be put into hospital before developing critical conditions. There is also an good Deutsche Welle article separating fact from fiction in the reporting of Germany’s handling of the crisis and another about research on drugs that can be used to fight the virus.

The discussion about face masks continued, with confusing, conflicting opinions. Minister of Economics Peter Altmaier called for respiratory masks for all workers. The government scientific institute, the Robert Koch Institute, warned however that masks can give a false sense of security and Jens Spahn said that there would probably not be a requirement to wear them, since most people were choosing to now anyway.

The head of the German Red Cross gave a warning that protective and disinfection materials in old age and care homes were inadequate and could result in a huge increase in hospital admissions.

One of the reasons that Germany’s mortality from corona is relatively low is that so far the average age of infected people is younger than in countries such as Italy; outbreaks in old age homes could raise the mortality rates significantly. This week saw increasing reports of corona cases in care homes and old age homes.

Berlin’s mayor, Michael Müller, had to apologise to the USA for accusing the Americans of re-directing 200,000 face masks meant for Germany to the USA. The Berlin government enlisted the help of the army to bring in 2 million face masks and 300,000 protective aprons.

Minister President of Bavaria, Markus Söder, promised that all nurses and carers in Bavaria will get a 500 euro bonus, in addition to the free food and drinks they are already getting; Berlin also announced a similar policy.

EU measures

Following disputes among European leaders and mounting anti-German criticism from Italy last week, two former ministers Joschka Fischer (Greens) and Sigmar Gabriel (SPD) warned that the corona crisis could break up the EU and called on the government to adopt Marshall Plan for Spain and Italy. Later, European Commission President Ursula von der Leyen joined their calls for a Marshall Plan. Angela Merkel said on Monday that the EU is facing the greatest test since its foundation and that economic stimulus programmes must take part on an EU as well as national level.

The ZDF Politbarometer this week found that 68% supported the idea of the EU giving financial support to countries hard hit by the virus, such as Italy and Spain; this was true of voters across the board, except for supported of the Alternative for Germany, only 28% of whom supported this help.

Following an EU finance ministers’ meeting on Tuesday, which failed to reach an agreement on an EU rescue package, since Spain and Italy continued to demand eurobonds, Green politician Jürgen Trittin said in an interview with the Welt, “Germany is now only represented by one face in the eyes of Italy and Spain. Olaf Scholz: without empathy in the face of a pandemic.” This prompted a Welt journalist to tweet, “If anyone in the Greens is wondering why their poll ratings are plummeting….”

On Thursday, the measures were agreed: a 2 billion fund from the European Investment Bank to loan money to businesses; the European Stability Mechanism extending a credit line for badly hit countries (240 billion euros), and a 100 billion euro loan scheme to help companies pay for workers’ wages instead of firing them.

Eurobonds were once again rejected by Germany. The FT reported that the German government’s resistance to eurobonds could end in the same way the government abandoned its black zero (balanced budget) policy a month ago. Merkel said in 2012 that there would be no eurobonds “as long as I live” and the Germans have always insisted that the European Stability Mechanism is the tool for emergencies. However, as the FT reports, there are growing voices for a change in policy.

Gloomy forecast

Very gloomy predictions were made this week in a report from five leading economic institutes, according to the Deutsche Welle. The report predicted a 4.2% drop in GDP this year, including a 9.8% slump in the second quarter of this year, the sharpest drop ever. Gross debt is expected to rise to 70% of GDP in 2020. However, the institutes agreed that Germany is in a good position to recover once the pandemic is over.

Hotter weather meant that more people started to disobey the regulations about going outside. Back in her office after two week’s quarantine, Angela Merkel made clear that people should not travel over Easter. On Thursday, she gave another speech in which she said that stronger restrictions would not be necessary – but she warned that people should not be reckless at this stage; the situation is fragile, she said.

While social distancing has been practiced in parliaments, there is one exception – politicians from the far-right AfD. A journalist tweeted a photo of 70 AfD MPs meeting to discuss their corona policy in the Bundestag on Tuesday – as a bonus, she commented, those who took part by phone had no voting rights.

The government’s approval rating remain high, with 72% satisfied with how it is handling the crisis, 93% approving of social distancing, and two thirds believing the health system can cope. 75% are concerned about the effect on the economy, and although most do not think their own financial situation, two thirds think it could deteriorate.

It was reported that the extreme left scene in Berlin was not prepared to forgo its traditional 1st May protest – and was planinng to go ahead with masks. A Berlin court ruled this week that the ban on religious gatherings was lawful because of protection of life and health.

More help for businesses

Finance Minister Olaf Scholz promised unlimited credit to businesses a few weeks ago. By the weekend, 3,200 applications with a volume of around 11 billion euros had been submitted to the state credit bank, the KfW, reported the Spiegel. Additionally, 1.25 million freelancers and small businesses had applied for grants from the government: 4.1 billion euros of grants of up to 15,000 euros have already been approved.

The government also extended its help to medium sized businesses. Following criticism that companies were having difficulty in getting loans approved, the government launched a quick program, in which the lending is not tied to the assessment of the company’s bank. The loans will be fully secured by the government.

Meanwhile, the Welt reported that the Chambers of Commerce has declared that businesses in Germany are overwhelmed by bureaucracy, and that during the corona crisis, can not meet the deadlines imposed by deadlines on tax and contributions.

Markus Söder called for a new plan to stimulate the economy, of similar size to the emergency aid already given once the initial crisis has past. He also called for tax cuts for businesses as well as individuals.

Effect on business

The Berliner Morgenpost noted that while the Germany auto industry – “the backbone of German industry with over 800,000 employees” – has been hard hit by a complete shutdown, with VW for example losing 2 billion a week, US competitor Tesla is profiting. “Tesla built 102,672 cars in the first 91 days of the year – more than ever before.” In addition, construction at Tesla’s new plant in Grünheide in Brandburg has continued during the lockdown.

On Tuesday, Lufthansa announced that it would decommission 40 aircraft and cut its Germanwings subsidiary.

The FT reported on another industry struggling during the corona lockdown: Berlin’s drug dealers, who are facing delivery and supply problems. According to the FT, customers are also stocking up on drugs in the same way as people are stocking up on toilet paper. The paper warns that the supply problems could result in deadly competition for supplies and access to transportation networks between rival dealers, In Berlin, there is also an underground club scene, still going strong despite the lockdown.

Exit strategy

The exit strategy continued to be discussed this week, as the infection doubling rate declined. Federal and state representatives are due to discuss lifting the restrctions next Tuesday. The Spiegel noted a change in tone this week – more noises are being made about an end to the restrictions. However, the main problem is that experts do not believe a vaccine will be available until 2021. The Spiegel reported on a strategy paper from the Interior Ministry which outlines a possible way out of the lockdown: schools, shops and restaurants could gradually reopen if there is an expansion of test capacities and strict isolation of infected people, as well as a face mask requirement.

By Wednesday say, Jens Spahn was discussing the strategy in the media The time after Easter would be the ‘fork in the road’. Businesses could be allowed to function again when they demonstrate proper hygiene and distancing provisions; major events such as soccer, celebrations in clubs or parties of all kinds will not take place for a long time in the usual way; extensive testing to find infected people and then isolate them will be used, and the government will rely on people to use an app which will find contact persons.

On Thursday the FT reported that Germany is to undertake the first mass antibody testing in Europe. The aim is to assess infection rates (and give a better idea of mortality and asymptomatic cases) and monitor the spread. The first results are expected in May.

Plans for the nationwide Abitur (A level) exams to take place after Easter progressed, with distancing regulations put into place.

Travel remained a major concern – not only regarding the possible the opening of borders for travel, bit also because of the economy, since globalisation has made economies interdependent. A Deutsche Welle article on the current travel restrictions can be found here.

On Tuesday, the British government admitted it has a ‘lot to learn’ from the German handling of mass testing (around 50,000 a day at the moment); testing is seen to be a crucial part of the exit strategy.

Refugee children

The Spiegel reported on a story which has been forgotten in the last month: only a few weeks ago, eight EU countries, including Germany, made a commitments to take in around 1,500 sick or unaccompanied children and adolescents from the refugee camps in the Greek islands – but since then, nothing has happened. SPD party vice president Kevin Kühnert called for Germany to act alone, since the EU has not acted. He told the Spiegel, “We are in a race against time. As soon as the corona virus arrives at the camps on the Greek islands, there will be an even greater humanitarian disaster.”

On Wednesday, Foreign Minister Heiko Maas announced that Germany will not wait for other EU countries, and take between 350 to 500 unaccompanied minors. The Zeit reported that he has said that at the moment, only Germany and Luxembourg are willing to take any children.

Reporting on the UK situation

Boris Johnson’s move into intensive care was widely reported, with many newspapers, like taz and the Zeit, pointing out that there is no constitutional regulation for what to do if a UK Prime Minister is unable to carry out their duties. The Tagesspiegel saw a metaphor for the current state of the UK in Johnson’s hospitalisation, critisicing the government’s corona strategy and commenting, “You can now clearly see how hollow the roar of the populists is. Populists cannot distinguish opinions from a strategy, ” and that, “a ventilated clown no longer makes anyone laugh in England either. He provokes pity.” An AP reporter tweeted a comment from the Süddeutsche Zeitung that Johnson’s weight increases his risk of being seriously ill, wryly commenting that the paper was doing a ‘remote assessment’ of Johnson.

Delay to electoral reform

The Zeit reported that the Left Party, FDP and Green Party all accused the government of using the Corona crisis to delay planned electoral reform. Reform is necessary, since according to the ‘overhang’ and ‘balance’ mandates, which adjust seats proportionately, the Bundestag (with 709 MPs) is the largest ever – and it could be even bigger next time. In elections, people have two votes: the first is a direct vote for an individual to be the constituency MP, and the second is a proportional representation vote for a party. Over­hang mandates occur when the number of constituency seats won by a party in a state exceeds the number of seats to which it would be entitled on the strength of the second vote and balance mandates make sure that the distribution of seats accurately reflects the proportional distribution of the second votes.

Minimum wage infringements

The Frankfurter Allgemeine reported that there was a 10% increase last year in violations of the minimum wage law: 110,000 criminal proceedings and 31,400 administrative offences were initiated. Offences were frequently found in the construction and ancillary building trade, cleaning, catering and accommodation sectors.

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