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Lockdown would cost many jobs: Corona crisis: Cases are rising sharply again. RKI sees some loss of control

Lockdown would cost many jobs : Corona crisis: Cases are rising sharply again. RKI sees some loss of control

The daily number of coronavirus cases has passed 10,000 for the first time in Germany. RKI President Lothar Wieler says “the situation has become very serious.” Another lockdown could have even more serious consequences for the economy than the first.

In Germany, the daily number of new corona infections has exceeded 10,000 for the first time. According to the Robert Koch Institute (RKI), the health authorities reported 11,287 cases within 24 hours. The previous high was on Saturday with 7,830 cases. The state of North Rhine-Westphalia (NRW) had 2,624 of those cases, meaning it has a higher proportion of the new corona infections than other states in Germany.

President of the RKI, Lothar Wieler warned that the virus could spread uncontrolled in some areas because chains of infection could not be traced. "The situation has become very serious," said Wieler. He spoke out in favor of making masks mandatory - not only on public transport and in stores, but also in rooms where many people gather.

The government is discussing further restrictions. Bavaria's Minister-President Markus Söder (CSU) is calling for a curfew starting at 9 p.m. for regions where they have 100 infected persons per 100,000 inhabitants within one week. Consumers, for their part, fear a second lockdown, according to the GfK Institute. As a result, the consumer mood for November has deteriorated considerably. The President of the World Medical Association, Frank Ulrich Montgomery, said that with 20,000 infections per day, "we are threatened with a second lockdown because there is no other way to stop the virus.”

If, as in the spring, the government decides to cut back on aspects of public life, this would be a severe blow to the economy in NRW and the whole of Germany. "In our estimation, the consequences of a second lockdown would be significantly higher than during the first one. The reason is that many companies have not yet recovered from the first one," said Torsten Schmidt, head of economic research at the RWI-Leibniz Institute for Economic Research in Essen. Contingency reserves have been used up. Reiner Hoffmann, Chairman of the German Federation of Trade Unions, appealed to companies not to neglect the protection of employees: "The increase in the number of infections is more than critical. From now on, every day counts to prevent a second lockdown".

"If there were to be a deceleration in the fourth quarter with further restrictions on economic activity, this would cost one percentage point of economic growth in 2020 and 2021," said Michael Grömling, head of economic research at the Institut der Deutschen Wirtschaft (IW) in Cologne. He went on to say that if there was a real lockdown, the economy could shrink further, possibly by eight percent in 2020, significantly more than in the financial crisis of 2009.

"The economy could get into the dreaded Double Dip, the double downturn," RWI expert Schmidt fears. The consequences: "The number of unemployed would again rise to well over three million nationwide. At present, the figure is 2.8 million. More companies would also have to close down than previously expected: "The number of insolvencies could rise to 10,000 in the first quarter," estimates Schmidt. Companies that are insolvent or indebted would then have to go back to the insolvency judge.

So far, NRW has come through the crisis somewhat better than Germany as a whole.

Orig. text: Antje Hönig

Translation: ck