In the fight against the corona pandemic, the economy Volker Wieland is calling for more speed.
The vaccination quota had to be improved "urgently", the economist told Merkur.de.
Munich - The economy Volker Wieland has spoken out in favor of stricter requirements in view of the steep rise in Corona numbers. A nationwide introduction of 2G rules in the leisure sector would create "strong incentives for a vaccination," said the member of the Advisory Council on the assessment of macroeconomic development to
Merkur.de *
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With a view to the possible economic consequences of the tightened Corona * requirements in many federal states, Wieland said that he currently sees no need for correction of the latest estimate by the Expert Council for economic growth in Germany. However, if, as in Austria, there is a new lockdown in Germany, growth in the current quarter could "fall to zero or into negative territory", explained Wieland. For the fourth quarter of 2021, the committee has so far assumed a growth rate of 0.4 percent.
Prof. Wieland, in view of the aggravated corona situation and the steeply rising incidences, concerns about the economy in Germany are also growing. The Bavarian Prime Minister Markus Söder announced further restrictions only on Tuesday. Saxony is already in partial lockdown. How dangerous is this development for the economic recovery in Germany?
We run the risk that the economy - especially consumer-related services - will slow down towards the end of the year. Before Christmas, of course, this has a very negative impact on the catering and hotel industry. However, it is not just closings that lead to consumer reluctance in contact-intensive areas, but also the reluctance of people, which simply results from the fear of infection when the number of infections increases. For this reason, among other things, the quarterly growth rates in our forecast for the fourth quarter of 2021 are estimated to be quite low at just under 0.4 percent and the first quarter of 2022 at 0.8 percent. I think 2G regulations could even help a little to reduce the fear of contagion. Because then you know when you go to a restaurant or an event that the risk of infection is reduced.
The Advisory Council recently assumed economic growth of 2.7 percent for the current year. In view of the latest developments, can this even be maintained?
The measures discussed so far or already implemented, such as 2G in the consumer-related area, regional closings of bars and discotheques, regional restrictions such as reducing the number of people per space in retail, do not, in my opinion, give any reason to drop the 2.7 percent for this year, and to reduce significantly by 4.6 percent for next year.
However, it can no longer be ruled out that there will not be significantly more stringent lockdown measures after all.
We are already seeing that in Austria.
What would such a scenario mean?
Let us assume that the lockdown measures for consumer-related services, hospitality and retail were just as tough as last year, and that these last through December and January. Then the fourth quarter could drop to zero or into negative territory. The development in the 1st quarter then depends on how quickly it can be reopened and, possibly, consumption made up. In such a scenario, a reduction in the forecast annual growth rates to values such as 2.5 percent and 4.1 percent in 2021 and 2022 would be conceivable. But that is only a very rough, first estimate.
I still assume that the recovery in Germany will remain intact, even if it will be postponed to 2022, partly due to the supply and material bottlenecks in intermediate products for industry.
Further lockdown measures could now also lead to a stronger than expected slowdown in contact-intensive services over the winter.
In view of the development, the discussion about measures to improve the vaccination rate, which is still low on an international scale, is also picking up speed. How could you get the unvaccinated to get immunized after all?
In any case, you should rely on 2G regulations in the leisure sector.
This creates strong incentives for a vaccination, at least for those who want to take advantage of leisure activities.
Incidentally, the employees there would also have to prove 2G.
In other countries such as Portugal and Spain, people were probably contacted several times directly with vaccination offers.
The question arises, why shouldn't we do the same?
Finally, vaccination requirements are possible for certain occupational groups.
The Bundeswehr is already doing this.
In order to increase the vaccination rate, some economists are now also relying on bonuses. Do we need incentives to vaccinate?
Incentives yes.
But how is it that southern European countries have been so much more successful in vaccination progress?
Vaccination should be made as easy as possible and unvaccinated people should be addressed directly several times.
In addition, 3G or 2G regulations would provide an incentive in the workplace.
It could also be the duty of the employee to be tested for a fee if necessary.
There are now also demands for an emergency stop switch, i.e. a short but comprehensive lockdown. Wouldn't such a hard cut be a better way to break the wave and pull the restrictions back on?
From an economic point of view, lockdowns are of course particularly damaging. But an uninterrupted further increase in the number of infections will overwhelm the health system and then cost even more lives. It is all the more sad that it was not possible, as in other countries, to achieve a higher vaccination rate among adults earlier. That urgently needs to be made up for. In any case, daycare and school closings should be avoided as far as possible. The children and adolescents had to suffer from restrictions due to the pandemic.
About the person: Prof. Volker Wieland has been endowed professor for monetary economics and managing director of the Institute for Monetary and Financial Stability (IMFS) at Goethe University Frankfurt since March 2012. The expert in monetary theory and monetary policy has been a member of the Advisory Council for assessing macroeconomic developments since 2013.
* Merkur.de is part of IPPEN.MEDIA.