Coronavirus outspread across the Globe has shaken the lives as well as the economies of all countries. In that context, Germany is no exception. As of today ie., 7th June more than 185K cases were recorded while 8700+ died.
Except for a few industries such as FMCG, HealthCare, Pharmacy & partially financial services rest others are beaten badly, and at this point in time it’s hard to predict complete recovery. Travel & Hospitality, Automotive & Mobility industries bore the maximum brunt & are still struggling.
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Many companies to cut down the operational costs & longterm sustenance have forced employees to reduce working hours (aka Kurzarbeit) & few companies laid off employees when their revenue streams drained completely. The German Automotive industry like other countries continues to struggle due to weak global demand & climate action much before Coronavirus. The lockdown indeed accelerated the crisis & many industries are at the verge of collapse.
Like Automotive, Aviation & Mobility industries are also facing an existential crisis. Few Low-Cost Carriers have already gone bankrupt & layoffs in news are not new anymore. Big carriers such as Lufthansa agreed the bailout package (€9bn) from the German government. But, not all air carriers received State support.
The tourism & Travel industry struggled the most with almost bookings close to zero due to coronavirus. While countries imposed Travel ban, EU borders closed by member states, traveling within Europe has become impossible & as a result of this, the industry suffered severely. During the Easter holidays, the lakes around Germany would be busy but this year the trend is broken & the lakes were empty.
Although neighbour states suffered heavily because of high mortality rates, Germany has had low mortality rates because of great healthcare system, timely response by the administrative departments and most importantly young people who got infected while they were on ski-vacation in Tirol and those attended Venice carnival.
Exit Strategy of Coronavirus::
As the situation evolves, it has become clear, we all have to live with Coronavirus until a safe vaccine is in place. Governments too have realized this and decided to resume Life & Business as usual with exit strategies. Few federal states in Germany have made masks mandatory while commuting with public transportation, in supermarkets & retail stores. Restaurants & beer gardens have been opened with social distancing instructions. Open pools, gyms will be opened from 8th June with more or less similar social distancing measures.
EU borders will be reopened from June 15 and international travel would probably be resumed from July or early August to kick-off business activities.
Economic package and aid by the Government ::
The German government has announced a 130 billion Euros stimulus plan to kickstart the hard-hit industries of Coronavirus. The measures include VAT cuts from 19% to 16% starting July 1st, 300 euro bonus per child, reduced levy on electricity costs, aid on social security contributions, rebate on electric cars.
The ministry of Economics has proposed a 5 billion Euro Car Bonus Scheme to boost automotive sales as the industry is in deep crisis. In addition to this Germany has announced 50 billion Euros Future Package to invest in future innovations on climate protection. Hope these measures would help the German economy to rebound, helps the industry to retain jobs.
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