Germany’s economic collapse: nearly 10 YEARS of growth wiped out in a nightmare for Merkel | World | News


In the second quarter of this year, the German economy contracted 10.1% compared to the first three months of 2020, as the crushing effects of the coronavirus crisis become increasingly evident.The German Bureau of Statistics said the GDP-adjusted index for inflation, seasonal and calendar effects fell to 94.26 between April and June.

The bureau said, “More recently the chain index was lower at 93.19 in the fourth quarter of 2010, so about 10 years ago. “

The huge April-June crash was sparked by a massive collapse in exports and measures introduced in a desperate attempt to contain the coronavirus pandemic.This will sound the alarm in Germany, because even in the worst three months of the financial crisis of 2009, the country’s economy shrank by less than 5%.

But the outlook for the third quarter is slightly more encouraging, with early forecasts appearing to show that the economy may be starting to recover.

The Ifo index rose in July for a third consecutive month and posted a rise for the first time since 2019.

Germany faces economic crisis after nearly 10 years of shattered growth (Image: GETTY)

The German economy plunged more than 10% in the second quarter (Image: GETTY)

A survey of industry executives found that they were starting to view their prospects more positively, with many service providers even describing the situation as good rather than bad.

Construction companies no longer expect businesses to collapse like they did in June, largely due to the massive coronavirus recovery pacakage announced by the federal government.

Despite encouraging signs, the German Institute for Economic Research (DIW) has warned that it could be two years before the massive second-quarter collapse can be recovered.

DIW chief economic officer Claus Michelsen said: “The signs are clearly pointing to a recovery.

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coronavirus from Germany

The coronavirus pandemic has made a huge dent in the German economy (Image: GETTY)

“But despite strong growth, it will probably take two years before the historic spring slump is offset. ”

There are also growing fears in Germany that a second wave of coronavirus infections could blow up another huge hole in the European Union’s largest economy.

It could bankrupt several companies, while exports are also at enormous risk as the pandemic continues to ravage trading powers such as the United States, to which German companies regularly sell many products.

The number of unemployed in July was 600,000 compared to a year earlier, but jobs are no longer being lost due to the coronavirus pandemic.

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The increases in unemployment have been attributed to the time of the year when jobs are normally cut and seasonally adjusted, with the number of unemployed people declining by 18,000.

In May, 6.7 million employees received partial unemployment benefits, according to preliminary estimates.

Applications from companies have also fallen sharply in recent weeks: in July, partial unemployment was only reported for 200,000 new employees.

Daniel Terzenbach, board member of the Federal Employment Agency (BA), said: “The labor market is still under pressure due to the corona pandemic, but the massive recourse to short-time working has prevented a greater increase in unemployment ”.

second wave of coronavirus germany

Germany fears second peak in coronavirus infections (Image: GETTY)

last german coronavirus

Germany continued to be gripped by the coronacirus pandemic (Image: GETTY)

But the Ifo Institute has warned of big differences when trying to weigh and balance this detail.

Ninety percent of people working in hotels and 68 percent of employees in the auto industry worked part-time in July, but that figure fell to just 10 percent in construction and the financial sector.

The current coronavirus pandemic has also delayed learning by about two months until at least the fall.

This month, 190,000 applicants were still looking for an apprenticeship, with the figure slightly higher in a number of vacant training positions.

Additional reporting by Monika Pallenberg.

It’s a story of rupture. More soon…


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