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Workers at the VW plant in Kassel in Baunatal: "Industrial production must not tilt"
Photo: Uwe Zucchi / dpa
Germany's top economists are warning of the large-scale closure of factories in the fight against the pandemic.
Six out of seven economic researchers interviewed by SPIEGEL are against paralyzing large parts of the industry.
Among other things, Thuringia's Prime Minister Bodo Ramelow (Left) is campaigning for this.
World Medical President Ulrich Montgomery also believes similar measures are partly justified if this is necessary to contain the pandemic.
"A compulsory closure of companies would not only hit the directly affected companies hard, but could also interrupt the supply chains and thus cause considerable costs for the entire economy," said the head of the German Institute for Economic Research (DIW), Marcel Fratzscher, the SPIEGEL.
Gabriel Felbermayr, President of the Kiel Institute for the World Economy (IfW), wrote: "If production were to be paralyzed on a large scale, it would have serious consequences for economic performance this year."
»The risk of bankruptcies and waves of layoffs would be greater than in spring«
Sebastian Dullien, IMK
Left-wing politician Ramelow calls for companies to be temporarily shut down that are not vital or that cannot be systemically shut down.
In addition to members of his own party, there are also representatives of the Thuringian Greens, who govern with the Left in Erfurt.
The SPD health expert Karl Lauterbach indirectly threatens industrial companies with production stops if the shutdown is not successfully completed.
In the spring, the Spanish and Italian governments paralyzed their economies for several weeks.
According to Sebastian Dullien, the scientific director of the union-related Institute for Macroeconomics and Business Cycle Research (IMK), an extensive closure would have serious consequences in view of the unstable condition of many companies: "The risk of bankruptcies and waves of layoffs would then be significantly greater than in the spring." IMK, two thirds of the economic slump in the first half of 2020 was directly due to declines in production in the manufacturing sector.
"Industrial production must not topple," warned Ifo President Clemens Fuest.
"The added value here is particularly high." The economy Monika Schnitzer and Torsten Schmidt, economic director of the Essen economic research institute RWI, also consider an industry shutdown to be wrong.
There is still plenty of room for improvement when it comes to protective measures
Dalia Marin, Professor of International Economic Relations at the Technical University of Munich, on the other hand, spoke out in favor of closing factories and cross-border freight traffic: “A complete lockdown now would have the advantage of reducing the number of infections exponentially before the mutated virus has the opportunity to spread.
Even China could only stabilize the situation with a draconian lockdown. "
The Munich economy Schnitzer considers such draconian measures to be excessive.
"So far, the necessary safety measures can be adhered to during the actual production," she argues.
Encounters during breaks, in the canteen or on the way to work are more problematic.
But that doesn't mean you have to shut down entire factories.
When it comes to protective measures such as the installation of filter systems, fever measurements and, above all, compliance with the distance rules, there is still "plenty of room for improvement."
All of the economists surveyed are in favor of companies allowing their employees to work from home - provided that this is possible in practice.
They don't want a blanket home office obligation: if only because of the lack of technology.
"For example, if you want to send all administrative employees from the health authorities to the home office, you have to equip them accordingly," says Schnitzer.
“Otherwise they cannot do their job.
Then we don't just have an economic problem, but a health one. "
Borders must remain open
Almost all researchers particularly strictly reject intra-European border closings for the transport of goods, such as at the beginning of the first corona wave in March 2020.
In view of the close international interdependence of the production processes, "a restriction in freight traffic would amount to a shutdown for many companies," says RWI economic expert Schmidt.
Freight traffic poses less risk of infection than passenger traffic.
"Maintaining the supply chain is important," argues DIW boss Fratzscher, "so that the basic health needs, the basic supply of food and other things of daily life are still guaranteed." IfW boss Felbermayr warns, " to repeat this mistake from the spring ":" However, it can make sense to limit and strictly control the exit from high incidence areas. "
Many economists also consider the idea of reducing or even discontinuing local public transport to be counterproductive.
"Nurses, doctors as well as employees in the supermarket or in food production and other care professions often come to work by public transport and could no longer do their job without this option," says IMK director Dullien.
In addition, employees without their own car are disadvantaged - especially if they do not have a secure job, adds Schmidt from RWI.
"A reduction in public passenger traffic beyond rush hour traffic would have significantly fewer consequences."
You can read the full statements of the experts questioned below.
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Marcel Fratzscher, DIW Arrow up Arrow down
Marcel Fratzscher
is President of the German Institute for Economic Research (DIW) in Berlin, Professor of Macroeconomics and Finance at the Humboldt University in Berlin and a member of the Advisory Board of the Federal Ministry for Economic Affairs and Energy.
Photo: diw
SPIEGEL:
What would it mean economically if we were to close factories on a large scale now?
Fratzscher:
A compulsory closure of companies would not only hit the directly affected companies hard, but could also interrupt the supply chains and thus cause considerable costs for the entire economy.
In comparison: We are now anticipating a two percent decline in economic output in Germany in the first quarter of 2021.
In the second quarter of 2020, however, the economy had shrunk by almost ten percent.
While there are differences in the world economy, the economic costs of systematic restraints on the economy would be enormous if numerous companies were to bankrupt and increase unemployment.
If such restrictions are pushed too far, the basic supply of the health system, with food and other everyday necessities, could also be jeopardized.
SPIEGEL:
What macroeconomic dangers would an extensive home office obligation entail?
Fratzscher:
It is important for both health and the economy if as many people as possible can work from home and do not expose themselves or colleagues to major risks.
However, the obligation to work from home could cause great economic damage, as it could severely damage effective working hours and productivity.
Compulsory home office is also impractical, as there are great differences in options and requirements even within companies.
There are certainly some companies out there that don't live up to their duty of care.
Most companies, however, behave responsibly and see it as their duty to protect their employees.
One should therefore not put the entire economy under general suspicion, but selectively address individual companies or industries with suitable measures.
SPIEGEL:
How important is it to keep borders open for freight traffic?
Fratzscher:
Closing borders for freight traffic would be extremely damaging economically and should hardly be of any health benefit.
Maintaining the supply chain is important so that basic health, basic food and other everyday needs are still guaranteed.
SPIEGEL:
What would a discontinuation or severe reduction in public transport mean in economic terms?
Fratzscher:
A big difference between the second lockdown and the first lockdown is the currently much higher mobility in the private behavior of people in Germany.
Very many people do not adhere to the recommendation not to have any contact with other people outside the household as much as possible, and thus make a decisive contribution to the spread of the virus.
Restricting private mobility is an important goal.
At the same time, public transport must continue to be maintained so that basic services are guaranteed and people in systemically important professions can perform their tasks.
Torsten Schmidt, RWIPar up arrow down arrow
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Torsten Schmidt
is the economic head of the RWI - Leibniz Institute for Economic Research in Essen
Photo: Jürgen Heinrich / imago images
SPIEGEL:
What would it mean economically if we were to close factories on a large scale now?
Schmidt:
There are already signs of a decline in economic output at the beginning of this year, although the industry has so far been only slightly affected by the measures.
A large-scale closure of factories would cause production to collapse again.
The severity of the break-in would depend on the specific decisions, for example about which sectors of the economy would be affected and which would be classified as systemically relevant.
SPIEGEL:
What macroeconomic dangers would an extensive home office obligation entail?
Schmidt:
Since the beginning of the pandemic, companies in which the changeover was technically and organizationally relatively easy are likely to have switched to home office.
Certainly, the home office share could easily be expanded a little in some industries.
An extensive home office obligation would also affect areas in which the transition to work in the home office is more difficult and would therefore be associated with higher costs.
The IT infrastructure has to be expanded and work processes have to be reorganized.
Overall, this change would lead to productivity losses.
Compared to a shutdown, this would be the lesser of two evils.
SPIEGEL:
How important is it to keep borders open for freight traffic?
Schmidt:
Due to the close international interdependence of the production processes, a restriction of freight traffic would amount to a shutdown for many companies.
For the German economy in particular, open borders in freight transport are crucial in order not to worsen the crisis.
Especially since freight traffic is likely to pose a lower risk of infection than passenger traffic.
SPIEGEL:
What would a discontinuation or severe reduction in public transport mean in economic terms?
Schmidt:
Restricting public transport would primarily affect commuters.
As long as you don't want to restrict operations, you shouldn't restrict commuter traffic either.
Otherwise there is a risk that employees without their own car will be disadvantaged, especially if they do not have a secure job.
The measures must therefore be coordinated with one another.
A reduction in public passenger traffic beyond rush hour traffic would, however, have significantly fewer consequences.
Monika Schnitzer, Economy Arrow up Arrow down
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Monika Schnitzer
has been a member of the Federal Government's Advisory Council for the assessment of macroeconomic development since April 2020, which is also known as the "Council of Economic Wise Men" and regularly publishes reports on economic development in Germany.
Schnitzer is professor for comparative economic research at the Ludwig Maximilians University in Munich (LMU).
Photo:
Peter Kneffel / dpa
SPIEGEL:
What would it mean economically if we were to close factories on a large scale now?
Schnitzer:
There is absolutely no talk of closing factories on a large scale.
So far, it has been possible to adhere to the necessary safety measures during the actual production.
Encounters during breaks, in the canteen, and possibly on the way to work are more problematic.
Here people often don't take the rules of distance seriously enough.
You don't have to shut down the whole factory to solve this.
Instead, one could invest more in filter systems for air purification.
Many protective measures that we know from other countries, such as fever measurement when entering the building, have so far only been used very rarely.
There is still room for improvement.
SPIEGEL:
What macroeconomic dangers (if there are any dangers at all) would be associated with an extensive home office obligation?
Schnitzer:
At the moment it is clear: Wherever it is possible to work from home, this should also be done.
The risk that productivity will decrease as a result is low if the necessary technical equipment is provided at home.
So far, however, this has still not been guaranteed across the board, especially not in the authorities.
For example, if you want to send all administrative employees of the health authorities to the home office, you have to equip them accordingly.
Otherwise they cannot do their job.
Then we don't just have an economic problem, but a health one.
SPIEGEL:
How important is it to keep borders open for freight traffic?
Schnitzer:
This is indeed important to avoid disrupting the supply chains.
Here, too, the following applies: fever measurements at the border, rapid tests, all of these could reduce the risk of transmission across the border.
However, it is not infected truck drivers that are currently making the headlines, but rather infected English ski tourists in Switzerland.
This kind of spread should be avoided.
SPIEGEL:
What would a discontinuation or severe reduction in public transport mean in economic terms?
Schnitzer:
The same applies here: Stopping local public transport is not the way to contain the pandemic.
Rather, it should be expanded so that those who drive to work are exposed to a lower risk of infection.
At the same time, it must be ensured that only those who use local transport who really need it for work or, for example, to take care of relatives.
Overall, the following applies: What matters is not how drastic the measures are, but that people adhere to them.
We can only reduce the number of infections if they understand that they have to reduce their contacts to the absolute minimum in this crucial phase of the pandemic.
Unfortunately, many people still do not seem to have recognized the gravity of the situation.
We need to convey even more strongly than before that each individual has a responsibility not only for himself but for his fellow human beings, and we appeal to act accordingly.
Gabriel Felbermayr, IfW Arrow up Arrow down
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Gabriel Felbermayr,
44, was born in Steyr, Austria and did research in Florence and Munich.
Since March 2019 he has headed the Kiel Institute for the World Economy.
Photo:
Carsten Rehder / dpa
SPIEGEL:
What would it mean economically if we were to close factories on a large scale now?
Felbermayr:
Industry is currently the beacon of the German economy.
If production were to be paralyzed on a large scale, this would have serious consequences for economic output this year.
Not only the companies themselves but also suppliers and customers would be affected.
An industry lockdown currently seems unlikely and also not necessary.
Most production companies are able to implement hygiene concepts and work under easily controllable conditions.
It is very likely that you are not the driver of the infection process.
Unfortunately, what we have been calling for since spring 2020 has still not been implemented: a systematic sampling of infection data in order to narrow down the actual places of infection.
The discussed tightening for the economy is still very general because there is simply no data basis and therefore no good justification for more targeted interventions.
SPIEGEL:
What macroeconomic dangers would an extensive home office obligation entail?
Felbermayr:
Out of self-interest, companies should implement home offices wherever this is organizationally possible.
It is also right that politicians insist on this in the name of fighting pandemic.
However, an obligation to work from home threatens to have many unwanted side effects and thus costs that are hardly manageable and controllable by politics.
Companies can and should better decide for themselves to what extent home office can be implemented in individual cases.
A blanket duty threatens to cause more damage than it brings.
SPIEGEL:
How important is it to keep borders open for freight traffic?
Felbermayr:
The consequences of large-scale border closings for freight traffic and for workers in the border regions are massive.
We shouldn't repeat that spring mistake.
However, it can make sense to limit and strictly control the exit from high incidence areas.
If freedom of movement is restricted in these areas, it allows more freedom for less affected areas - that is, more regional differentiation.
SPIEGEL:
What would a discontinuation or severe reduction in public transport mean in economic terms?
Felbermayr:
The usage figures in public transport have already collapsed.
People use public transport significantly less and have significantly reduced their mobility overall.
If you stop this traffic completely, there is a high probability that you will mainly hit those who are urgently dependent on it.
If employees in health care facilities or in food retailers cannot get to their workplaces, we may endanger systemically important functions.
It would be better to keep passenger traffic going with possibly stricter distance requirements and controls.
Sebastian Dullien, IMK Up arrow Down arrow
Professor
Sebastian Dullien
, born 1975, has been head of the union-related Institute for Macroeconomics and Business Cycle Research (IMK) since April 1st.
He is also professor for general economics at HTW Berlin.
Photo: Karlheinz Schindler / dpa
SPIEGEL:
What would it mean economically if we were to close factories on a large scale now?
Dullien:
A large-scale closure of factories should lead to an even bigger slump in economic output than in spring 2020.
As a reminder: At that time, German industry was not affected by officially ordered plant closings, but was hit hard by the interruption of cross-border supply chains and the collapse in global demand.
Closing the manufacturing industry now would therefore be a much harder intervention than it was then and should also have more serious consequences.
At the moment there is also the fact that many companies are already weakened.
The risk of bankruptcies and waves of layoffs would then be significantly greater than in spring.
In addition, by closing the industry, Germany would now disrupt cross-border supply chains and thus contribute to a deeper economic slump across Europe, especially at a time when the economies of the partner countries are recovering.
This could push the whole EU back into a deep economic crisis.
The industry therefore continues to face the challenge of preventing infections in factories through effective occupational safety and hygiene concepts.
SPIEGEL:
What macroeconomic dangers would an extensive home office obligation entail?
Dullien:
The consequences of an obligation to work from home would depend on the details of the implementation and the possible exceptions for areas where home office is not possible.
If it is possible to get all those back into the home office who were able to work from home in April but are not doing it now, there should be no noticeable macroeconomic damage and mobility and infection rates could be noticeably restricted.
However, this is difficult to implement legally because it is difficult to write rules that cover all eventualities and individual circumstances.
It would be better if employers and employees themselves consistently check where home office is possible without massive damage and, as far as possible, implement home office quickly now - even if it is not the ideal way of working in individual cases.
A personal loss of control or work productivity should now take a back seat to society as a whole.
Compulsory home office without necessary exceptions, on the other hand, would mean interruptions in the business process in many areas with noticeable negative macroeconomic consequences.
SPIEGEL:
How important is it to keep borders open for freight traffic?
Dullien:
In order to avoid a slump in economic output like in spring 2020, it is crucial to keep the borders open for freight traffic.
According to IMK calculations, two thirds of the economic slump in the first half of 2020 was directly due to declines in production in the manufacturing sector;
You have to add the resulting declines in value creation at company-related service providers.
Closing the borders for freight traffic would mean a repetition of these effects.
SPIEGEL:
What would a discontinuation or severe reduction in public transport mean in economic terms?
Dullien:
The suspension or severe reduction in public transport would mean that many industries are no longer able to work properly and, in case of doubt, the supply of the population is also at risk.
Nurses, doctors as well as employees in the supermarket or in food production and other care professions often come to work by public transport, especially in metropolitan areas, and without this option they could no longer do their work.
Dalia Marin, LMU Munich Arrow up Arrow down
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Dalia Marin
is Professor of International Economic Relations at the TUM School of Management at the Technical University of Munich.
Photo: Andreas Rentz / Getty Images
Marin: In
view of the changed situation, I am in favor of a tightened lockdown.
The partial lockdown did not bring the desired decrease in the number of infections.
Above all, the death toll is increasing dramatically.
And now a new situation has arisen.
A coronavirus mutation can also be observed in Germany, which is far more contagious than the original coronavirus.
Virologists therefore predict that despite lockdown there will be an exponential
There may be growth in the number of infections that we can then no longer bring under control.
A complete lockdown now would have the advantage of lowering the number of infections exponentially before the mutated virus has the opportunity to spread.
From an economic point of view, the best medicine for business is coping with the corona pandemic.
Only then will people return to their habitual consumption and investment behavior that will get the economy back on its feet.
We know from studies that fear of the pandemic means that people do not maintain their habitual consumer behavior, even when restaurants, bars, hotels and shops are open.
For fear of the pandemic, there is no consumption and if there is no consumption, then the companies do not invest.
Of course, the costs of closing factories and freight transport are enormous.
We know this from our experience of the economic costs of the March and April pandemic outbreak.
But Sweden has had to accept economic costs similar to Germany, even though it has not had a lockdown and has relied on herd immunity.
China, too, could only stabilize the situation with a draconian lockdown.
And China is always cited as an example of successfully coping with the corona crisis.
