Despite huge aid, economists do not anticipate inflation for the time being


Economists do not expect prices to rise in a timely manner.

(Photo: dpa)

Munich Regardless of gigantic government spending, economists do not anticipate a surge in inflation in the Corona crisis for the time being – on the contrary, falling prices. A key factor in this is the drop in oil prices, according to several economists.

“In view of the severity of the current recession and against the background of the extremely sharp drop in oil prices, consumer price inflation should be significantly lower on average in 2020 than in the previous year,” says Michael Menhart, chief economist at the world’s largest reinsurer Munich Re. “I suspect that the corona crisis will lead to deflation,” says Markus Demary, Senior Economist for Monetary Policy and Financial Markets at the Cologne Institute for Economic Research.

“In the short term, the Covid 19 crisis is likely to have a deflationary effect,” says Katharina Utermöhl, Senior Economist responsible for Europe alliance. Europe’s leading insurer expects an extremely low price increase of 0.2 percent for 2020 in the euro area, and an inflation rate of 1.6 percent for 2021. BayernLB chief economist Jürgen Michels shares his colleagues’ assessments: “In the short term, I can clearly see that the pressure on prices is going down – also because of the oil price trend.”

Not only the governments, but also the companies will be sitting on mountains of debt after the crisis. “This debt has to be reduced and the debt reduction has priority over new investments for a certain time,” says IW money market specialist Demary. “Due to the reluctance to invest, demand is lacking, causing price growth to stagnate.”

Two of several other factors that Demary names: risk aversion and presumably subdued demand for the end of the pandemic. “Companies and households are more likely not to invest, but to wait and see that the uncertainty falls.”

Mountains of debt become the sticking point

And what about the end of the crisis? That depends on the extent and pace of the subsequent recovery, as Munich Re chief economist Menhart says – “although we are currently not assuming a fundamental change in the inflation outlook and therefore expect inflation rates to be roughly pre-crisis levels.”

However, like lawyers, economists analyze a variety of factors in their assessments. Some of these factors could well lead to a return in inflation. “But as soon as the crisis is over, dealing with the accumulated mountains of debt could turn out to be a sticking point,” says Allianz economist Utermöhl.

Experience from the financial crisis had shown that the resulting debt has not been reduced in many countries. “On the contrary: global debt has reached a new record high in 2019,” says the economist. “Since there will hardly be any productivity boost in the near future, I assume that the second path will ultimately be taken” – ie inflation.

Munich Re chief economist Menhart points to another point: “However, there are risks of higher inflation especially if, with normalizing economic demand, companies are unable to restart production sufficiently quickly.”

BayernLB chief economist Michels also believes that inflation can return. “In the medium term, I see a certain risk that inflation could go up, but only when we are economically back to the level we had before the crisis.” According to Michel’s assessment, this could only be the case in 2022/23.

“We noticed in the Corona crisis that we had too few reserves for many things,” says the Munich economist. “If we have a higher level of storage again, it costs money. And if you can no longer rely on international supply chains, production may be more local, but more expensive. These two factors could drive prices up. ”

More: Fluctuations on the stock exchanges are extreme due to the Covid 19 pandemic. But there is a way out: alternative investments. The Handelsblatt presents them.


False incentives, fraud, debt: the side effects of the corona crisis

The Chancellor is in top form in times of corona crisis. Angela Merkel explains complicated population doubling rates and reproductive numbers. But she also knows everyday things. “They have to be washed or ironed regularly, put in the oven or in the microwave,” Merkel explains how to care for respiratory masks. “Even if that sounds a bit housewife, so to speak.”

The omniscient state – embodied in the chancellor. The subjects are explained life down to the smallest detail. With this self-image, Merkel takes “measures that have never existed in our country before”. Fundamental rights are restricted, the economy is pushed to the brink and then supported with unprecedented aid.

One of Merkel’s closest confidants, Peter Altmaier, is more than enthusiastic. “An uncle who brings something is better than an aunt who plays the piano”, the Federal Minister of Economics remembers of his childhood.

And what is brought along! If you add up everything the federal government now wants to offer to combat the corona crisis, you get a gigantic sum of at least 1.2 trillion euros. No other country in the world has raised so much money in relation to its economic strength.

Germany has a full 35 percent, far more than the EU average or the USA. Federal finance minister Olaf Scholz did not understate what he promised a few weeks ago: “It is not spilled, but padding.”


The increase in importance and power is unique. Never in the history of the Federal Republic has a government intervened so quickly and deeply in public life and thus in the economy. After the financial crisis, German government debt rose by 315 billion euros in one year. The value of the federal, state and local governments will be far exceeded in this crisis. “I am worried whether we will be able to return to normal economic policy,” says Lars Feld, Germany’s top economy.

The measures to protect health are understandable. But the question increasingly arises: what side effects do the multi-billion dollar rescue programs have? The free market is disturbed, competition is distorted, prices lose their signal strength.

“As much market as possible, as much state as necessary”, the famous words of former Federal Minister of Economics Karl Schiller lose their meaning every day.

There is a risk of higher prices, inefficient companies and loss of wealth. It is significant that more and more companies are turning to the Bundeskartellamt during the corona crisis in order to be exempted from cooperating with competitors. The new spirit of state economy speaks.

Spend as much as you can. The year 2020 will be disastrous. Kristalina Georgiewa (IMF chief)

Certainly, help for companies with no fault of their own must be provided. But with the flood of support funds, the risk of misallocation is high. Capital and labor are tied up in companies with below-average productivity, less investment and innovative strength.

A few weeks ago, after a parliamentary request from the FDP for possible support from zombie companies, the Federal Ministry of Finance had to admit that “necessary market processes of creative destruction are hindered”.

The concern is justified that the state is eating itself too deeply into the economy, throwing privacy and data protection partially overboard and that the influence on the market will not be reversed after the end of the crisis.

A look at history suggests little good. The federal government is still 25 years after the IPO Deutsche Telekom still the largest single shareholder.

Fundamentally, there is a problem that is known in the economy as moral hazard: companies and citizens behave irresponsibly or carelessly due to existing false incentives. The news of fraudsters sneaking up subsidies is increasing.

“The state is a lousy entrepreneur”

The appearances of Altmaier and Scholz are characterized by superlatives. At the federal press conference, they will be presenting the rescue packages worth billions to the public with great regularity. “This is the most comprehensive and effective guarantee that there has ever been in a crisis,” said Altmaier in mid-March. “This is the bazooka, we’ll look for small arms later,” the Federal Minister of Finance said at the appearance.

The small arms that have now been added are quite large-caliber. Scholz announced a debt-financed supplementary budget of 156 billion euros. This includes an emergency fund with a volume of 50 billion euros, which is aimed at the self-employed and small businesses with up to ten employees.

The federal guarantee for the state bank KfW is increased by up to 450 billion euros. And then there is an Economic Stabilization Fund (WSF) with a volume of 600 billion euros. The majority is earmarked for government guarantees to keep companies liquid.

100 billion euros are reserved for possible investments, i.e. partial nationalization of companies. The battered Lufthansa is already holding talks about state participation.

You can still hear Altmaier’s words: “The state is a lousy entrepreneur.” The Federal Minister of Economics at least dedicated the most beautiful hall in the ministry to Ludwig Erhard. But he is currently just as far away from Erhard’s mantra as the Germans are from summer leaves in Mallorca.

Minister of Economics Peter Altmaier (standing) and Minister of Finance Olaf Scholz (front)

The father of the “German economic miracle” throbbed to measure, he remembered sentences, the state should not be a player, but an arbitrator in the economy. Now the state is preparing to take over the entire football club.

No other industrial country is helping its economy with such large sums as the Federal Republic. This shows a new evaluation by the International Monetary Fund (IMF). He does not criticize Germany, on the contrary. “Spend as much as you can,” advises IMF chief Kristalina Georgiewa. The economic situation is too depressing.

The Council of Experts is now assuming that the economy will decline by more than 5.5 percent this year. This is the case that was previously treated as a worst-case scenario. The economic downturn would be worse than in the global financial crisis. 725,000 companies have registered financial difficulties and short-time work.

Including: hospitals. Health Minister Jens Spahn ordered them at the beginning of March to postpone all planned operations. For the hospital operator, this means severe revenue losses. More than a third of the intensive care beds are not occupied. With the Hospital Relief Act, the federal government created a regulation to compensate the clinics for the failures. But that’s far from enough.

This is the bazooka, we’ll look at small arms later. Olaf Scholz (Federal Minister of Finance)

Some private organizations have registered short-time work, including the Schön-Klinik group. The head of the German Hospital Society, Gerald Gaß, sees the time for a “careful, gradual resumption of regular care”.

Spahn also said last week that clinics could “gradually return to normal”. “We do not want to keep 40 percent of the intensive care ventilation beds in Germany permanently”, said the minister.

The pressure on the companies is huge, the need for help is great. This year alone, the federal government is raising 156 billion euros in new debt. The federal states are also preparing an extensive flood of money for pumps.

According to a survey by the Handelsblatt newspaper among the 16 state finance ministries, they are currently planning 65 billion euros in new debt to fight the crisis. In addition to the federal government’s huge € 1.2 trillion rescue package, the federal states are also helping their companies and the self-employed. Bavaria alone has launched a fund with 60 billion euros.

The IMF chief not only welcomes the gigantic aid package in Germany, the monetary fund also calls for thorough control. “Keep the bills,” said Georgiewa. Transparency and accountability should not be put off in the face of the crisis. Whether Germany is world champion in this discipline, doubts are increasing.

Risk zombie company

The financial crisis shaped a saying by the former head of central bank in Europe, Mario Draghi: “What ever it takes”. In this crisis, it becomes a “Whatever, take it!” Aid is mostly spent without checking, the money cannot be distributed quickly enough.

According to an overview by the Ministry of Finance and the Ministry of Economics, over 26 billion euros were applied for by KfW Hilfen. Almost 13,000 of the more than 13,200 applications were approved. In other words, almost anyone who wants help gets it, most likely companies that didn’t have a working business model before the pandemic.

This easily creates zombie companies that are only alive because of generous state aid. After all: With the large sums, the KfW steering committee seems to be examining it more closely. So far, around 8.5 billion euros have been approved. So it takes a little longer for the large-volume applications.

In contrast, the self-employed and small businesses with up to ten employees are suspiciously fast. So far, according to the overview of 1.65 million applications, around 1.1 million have been approved and more than nine billion euros paid out. These are not loans, but aid that does not have to be repaid.

“Speed ​​and thoroughness go hand in hand: it is carefully checked who receives the money,” Finance Minister Scholz promised. But is that true? North Rhine-Westphalia and Berlin were even recently forced to suspend immediate payments because large-scale fraudsters wanted to get to the pots.

There are also problems with honest entrepreneurs. In North Rhine-Westphalia, for example, the self-employed and small businesses are always granted the maximum amounts of EUR 9,000 and EUR 15,000 – regardless of need. This practice is not well understood in the Federal Ministry of Economics. Because a flat-rate payment of maximum amounts was actually not intended.

The aid should amount to up to 9,000 euros for companies with up to five employees and up to 15,000 euros for up to ten employees. The emphasis here is on the “up to”. According to the Ministry of Economic Affairs, the actual amount should be based on sales and operating expenses for the next three months. An entrepreneur with zero euros turnover and 1000 euros costs would be entitled to 3000 euros in emergency aid.

But these details were lost somewhere in the confusion between the federal states and the federal states. The up to 50 billion euros are provided by the federal government. Although federal money is at stake, it is up to the federal states how much they scrutinize companies. In Hamburg, for example, a liquidity check is required. Other countries are significantly less strict so that aid can flow as quickly as possible.

In Berlin, more than a billion euros were paid out to solo and small entrepreneurs within days. And the Berlin Senate also admits behind the scenes that surely there are also deadweight effects. Since no examination was carried out, almost everyone received 14,000 euros in a combination of federal and state funds. These include the self-employed, who normally have annual sales that are significantly lower, they say.

Some recipients are now voluntarily repaying the aid for fear of sanctions. But whether a subsequent thorough examination is possible to convince fraudsters is skeptical in financial management.

Dangerous false incentives

The economic nonsense, which is operated partly in the name of Corona, is great. Governments in the federal and state governments are increasingly creating the illusion that they can regulate everything with state trillions. And more and more, government intervention and expansion is creating false incentives in all areas of the economy, which can be revenged bitterly.

Take the housing market as an example: the Federal Minister of Justice, a woman from the SPD, wanted to protect the tenants. The result is a half-baked law that gets small landlords into trouble. The law was so badly made that solvent companies like Adidas or Deichmann used the gaps and simply suspended the rent payments. Only after a storm of indignation did Adidas row back.

Take the example of KfW loans: After the institutes hesitated to pass on the subsidized loans from the Staatsbank KfW to companies because they still had to bear ten percent of the default risk, the state assumed full liability. With the danger that house banks will now be able to provide loans to companies that have long been bankrupt.

The banks don’t care, they are released from any liability, but of course they still make good money from their business. The fool is the taxpayer who has to answer for the defaults.

Example of short-time work: Short-time work allowance is a tried and tested crisis instrument. The state replaces up to 67 percent of net wages. However, the SPD was not enough. In the coalition committee on Wednesday, she pushed for an increase to 80 percent.

It is the most comprehensive and effective guarantee that there has ever been in a crisis. Peter Altmaier (Federal Minister of Economics)

However, a general increase would have significant deadweight effects: Many companies are already increasing short-time benefits from their own resources. Apart from that, the short-time work allowance is not meant to secure the standard of living, but rather to ensure the survival of companies and thus avoid unemployment.

In other areas, the federal corona strategy is rather arbitrary. The craft complained that the vehicle registration offices were closed. There is also much discussion about opening shops up to the limit of 800 square meters. This border was communicated at least improperly and caused confusion and indignation among the shopkeepers.

Now a Hamburg administrative court has declared the 800 square meter rule to be illegal. The court could not understand why opening larger sales areas alone should attract more people to the city center. Necessary infection protection measures could be followed at least as well in larger stores as in smaller facilities.

Whimsical and impractical was initially the requirement that repair shops were allowed to remain open, but the sales rooms had to be closed. Many craftsmen wondered if they could lead the customers through the sales room into the workshop. Another detail from this series of undesirable side effects of the rescue policy.

The border closures, for example with the Czech Republic, mean that the bricklayers are missing in the construction industry and the harvest workers in agriculture from Romania. The state decides a lot, but the consequences are borne by the entrepreneurs and their employees.

The argument for the state’s rapid generosity in the crisis is: rather spend more now to prevent the economy from crashing and millions of jobs be lost than have to finance mass unemployment for a long time. This approach is absolutely correct. But it also remains true: somehow the state rescue billions have to be financed at least in the medium term if the next generations are not to be overwhelmed.

Currently this is done through the use of reserves and debts. Germany certainly has scope. The Federal Republic had just pushed the debt level to below 60 percent, thereby meeting the Maastricht criteria for the first time in many years in 2019. But that will be the last time for a long time.

As a result of the corona crisis, the federal government expects a general government deficit of 7.25 percent of gross domestic product (GDP) this year. The debt ratio as a share of all debts in GDP is estimated at 75.25 percent, as can be seen from the German Stability Program 2020.

“The projection is currently subject to very high levels of uncertainty,” says the current report. In other words, the debt level could be even higher. This mainly depends on how high the losses are that the federal government will incur from its guarantees and sureties.

Given the huge commitments, some in the grand coalition are trying to put the brakes on. “I don’t like the fact that we almost always get new suggestions every hour, what else can you do,” said Union leader Ralph Brinkhaus. “All of this must also be paid for.”

In a crisis, the state’s money is loose. Some sense their chance to finally implement long-held plans.


Economy warns of exaggeration in the fight against Corona

Dusseldorf The Chairman of the Council of Experts, Lars Feld, urges the Federal Government to take measures to fight the corona crisis. “Above all, what is currently being discussed is problematic. You get the impression that every industry wants specific support, ”Feld told the Handelsblatt.

The hospitality industry wants the reduced VAT rate that has now been decided. The auto industry is again asking for a scrappage premium, and retailing vouchers, says Feld. “You could go on almost any way – who doesn’t have one yet, who wants to do it again.”

“If you go this route, you will hardly be able to catch it afterwards in terms of fiscal policy,” warns the head of the Freiburg Walter Eucken Institute. This applies “also to social policy measures such as the increase in short-time work benefits or the extension of the duration of unemployment benefits”. “I’m more worried about whether we will be able to return to normal economic policy,” says Feld.

The economist also disapproves of the federal government’s policy on industrial policy: “If Corona is now used to quietly implement questionable industrial policy goals, I find that unacceptable.”

Specifically, it refers to the recent tightening of the Foreign Trade and Payments Act. “The goal of building a fortress Europe is definitely the wrong way to go,” said Feld. Germany in particular, as the largest economy, must speak out for openness. “We cannot leave the Dutch alone to stand up for a market economy policy,” he warns.

He expressly warns against the introduction of a property tax. “To talk about a property tax in this situation is insane. The best way to pay off the debt is with an intelligent growth strategy, ”said Feld.

Read the full interview here:

Mr. Feld, you are considered the nation’s regulatory conscience. The state experiences something of self-empowerment in corona times. What scares you more: the virus or the political measures against it?
“Fear” is the wrong expression in both respects. I know the medical problems abstractly, but I don’t feel any threat. Of course, this can change quickly if I experience illnesses in my personal environment. This is often the case. As far as the state measures in the fight against the crisis are concerned, I am not afraid either, I am more concerned that we will be able to return to normal economic policy.

The state intervenes massively in contract law, it relaxes bankruptcy law, it communitises risks. In your opinion, is that all still proportionate?
Overall, I think the aid package is proportionate. You can argue about individual measures, especially with tenancy law. However, one has to say that the state there has been massively interfering with freedom of contract for a long time: through the rent brake or the rent cover in Berlin, which is probably unconstitutional. I criticized that before Corona – and I’m also criticizing it now.

So you don’t see a new quality of state intervention?
But, above all, what is currently being discussed is problematic. One has the impression that each branch wants specific support. The hospitality industry wants the reduced VAT rate that has now been decided. The auto industry is again asking for a scrappage premium, and retailers are demanding consumer vouchers. This could be continued almost indefinitely: Who has not yet, who wants again?

If you go this route, you will hardly be able to catch it afterwards in terms of fiscal policy. Ultimately, this also applies to social policy measures such as raising short-time working benefits or extending the duration of unemployment benefits.

The current bailout package is well over a trillion euros, i.e. more than three times the federal budget – these are sums that recently seemed unthinkable. Will the state’s calculation work, so now to save jobs, will it cost what it wants? Otherwise, the state would have to pay for the millions of unemployed anyway …
Yes, the sums are big. However, many simply add up everything that is put in the shop window – loans, grants, guarantees and guarantees. You have to take into account that not everything has an impact on expenditure, loans are repaid and guarantees are not drawn. The decisive factor is whether the measures are targeted.

Where do you see the debt ratio in the medium term?
By the end of 2021, we will probably be back to around 80 percent of economic output, roughly the level we had at the end of the financial crisis.

Do you think politics and science still have an overview? When was it that the state had to keep thousands of companies alive – and probably for months?
I don’t think the state will be able to maintain this for months. It can mitigate the consequences, but it will not be able to save all companies and jobs. We will have bankruptcies. Ultimately, it’s about helping companies that have a viable business model over this cliff. It should not be forgotten that companies are in this situation because the state massively restricts our freedoms during the pandemic. If there were a claim for compensation from the state, the whole thing would be more expensive.

Who pays the bill in the end? There is already debate about balancing the burden …
There is, of course, this debate, but it is a harmful one, with a particular focus on the ideological interests of the parties. To talk about a wealth tax in this situation is insane. The best way to pay off your debt is to use a smart growth strategy.

What do you think of the fact that the private banks are now providing KfW loans with a volume of up to 800.000 euros no longer have to assume any liability, so get a 100 percent guarantee from the state?
If you bear in mind the Federal Government’s goal of mitigating corona-related defaults with liquidity aid, that makes perfect sense. Of course, it is cleaner from a regulatory perspective to take the banks at risk. But then the measure would not work. Even with a liability of only ten percent, banks are very hesitant to grant loans in this difficult situation. Of course, we cannot grant such KfW loans on a permanent basis.

We cannot leave the Dutch alone to stand up for a market economy policy.

But isn’t that a disguised bank bailout program?
I would not say that. It dissolves the risk aversion of privately liable bank executives. Ultimately, credit-based liquidity support is hardly an option for many companies currently affected, provided they would become excessively in debt.

Another instrument that is often mentioned is government participation. Will it happen?
I cannot imagine that we can do without state participation in certain industries – for example, with airlines. Until the Lufthansa back to pre-crisis levels, it may take a long time. The decisive factor is whether they are silent participations or whether the state wants to exercise control rights. I prefer the former because with a stock package it usually takes longer for the state to withdraw.

The bank bailouts during the financial crisis in the USA are always considered exemplary, although there were equity investments …
Yes, that’s right, but the state quickly withdrew there. The following applies: If the control function, then please use the exit scenario.

They probably refer to Commerzbank, where the state is still involved after more than ten years.
Yes, it would be even more serious with massive industrial holdings like we used to have.

Now there was a trend towards industrial policy even before the corona crisis. The economics minister tightened the foreign trade law – and added again during the corona crisis: are we experiencing a turnaround?
Unfortunately, there is a turnaround. If Corona is now being used to quietly push through questionable industrial policy goals, I find it unacceptable.

Now this policy is being carried out by the CDU-led Ministry of Economic Affairs. Are we threatened by French conditions?
The goal of building a fortress Europe is definitely the wrong way to go. Germany in particular, as the largest economy, must speak out for openness. We cannot leave the Dutch alone to stand up for a market economy policy.

Isn’t there a good reason to protect some industries – when it comes to security, for example in the case of the Chinese network supplier Huawei?
Of course, the state has to look when a state investor from China is investing in critical infrastructure. But now that doesn’t just apply to China. American investors are now being looked at just as critically. A systematic foreclosure strategy threatens. What is considered “safety-relevant” must therefore be clearly defined.

The law speaks of an “expected impairment” of public order or security. There seem to be no limits to arbitrariness, right?
The Ministry of Economy is now keeping everything open to prevent any takeovers. The whole thing is also enriched with a participation facility and the economic stabilization fund. It is a very unfortunate combination.

Even mouth protection and protective clothing are considered to be safety-relevant. They may be relevant to health, but they do not have to be produced in Germany. In this case, the state must create strategic reserves.

Back to the economic risks again. If the lockdown has such devastating consequences in Germany, what about countries like Spain and Italy that are already heavily indebted?
There is no way around these countries pursuing an expansionary fiscal policy and driving up debt levels. There is no alternative in the face of this great crisis.

Aid programs such as those in Germany cannot be afforded by these countries, which have been hit much harder by the corona crisis …
I wouldn’t say that in general. Spain and France have enough leeway with a debt ratio of 100 percent. I think 120 percent would be possible without them being in the focus of the financial markets.

Italy, which has a debt ratio of almost 140 percent, financial market players have long had their sights on them. Only thanks to the massive intervention of the ECB has interest rates dropped to a tolerable level again …
Yes, Italy is the real problem. The government debt there is moving towards Greek dimensions in terms of economic performance – and this is about a G7 country.

As far as the corona pandemic is concerned, Italy is not in debt to this crisis. Regulatory policy or not: Do you understand Italy’s prime minister, who vehemently demands the solidarity of the strong countries?
I differentiate between understanding and acceptance. I understand that Italy needs support given the many deaths. And I understand that the Italians are now doing everything they can to protect themselves against possible distortions in the financial markets with external help. What I cannot accept is Premier Conte’s blackmail strategy, which is unique in its sharpness.

Isn’t this attitude due to sheer misery?
That may be the case, but the extortionate approach could end up being counterproductive. The government cannot credibly threaten to exit the euro because the economy would collapse completely.

But the Italians know very well that an exit from Italy would very quickly result in a collapse of the monetary union, which the rest of Europe can hardly afford …
This may be. Nevertheless, Conte’s strategy is questionable because Italy would suffer much more. In Italy, therefore, there is rightly a debate as to whether the prime minister does not overdraw. Italy is well supplied with the funds that have been made available – i.e. the scarcely conditioned loans from the ESM rescue fund with the possibility for the ECB to buy unlimited government bonds (OMT).

I reject joint and several liability. That would be a fall for me.

Italy insists on corona bonds, i.e. the joint borrowing for this crisis. Wouldn’t that be an important symbolic signal for Europe’s cohesion?
No, I’m completely the politician of order. I reject joint and several liability. That would be a fall for me.

But isn’t it the more honest way in the end? A communitization of risks has long been taking place through the ECB’s balance sheet, an institution that is not at all legitimized for such a redistribution policy …
Again, joint and several liability between states is out of the question for me. Other forms of joint liability, such as joint liability or guarantees for debt, can be discussed.

Discussions about a fund at EU level – possibly parallel to the ESM – that is financed by bonds guaranteed by member states and from which transfers are paid – all of this is conceivable. The problem with joint and several liability: Here the creditor can pick out the most solvent country – and force it to be repaid.

The crisis could hit the emerging markets even more severely than Italy. We are obviously experiencing a crisis of a whole new dimension. Not only almost all industries are affected, but also all regions of the world – at the same time. Some already compare the economic consequences with the Great Depression in the 1930s. Do you think this is alarmist?
No, I don’t think it’s alarmist. There are parallels as to the dimension of the economic downturn; but not on the job market. In addition, the reasons are completely different. The current crisis cannot be compared with the Spanish flu either. At that time after the First World War, the economies were very weak.

The fact is: A crisis as we are now experiencing it is unique. It is not only the slump in the economy as a result of the lockdown, but also the interruption of the international supply chains.

How do you explain that the markets are still reacting almost moderately?
The markets are still assuming that the gigantic rescue packages will help to overcome the liquidity problems. Whether this will really be the case depends on the further development of the pandemic. I would therefore not rule out further slumps in the financial markets.

The Ifo Institute anticipates a 20 percent drop in GDP in the worst scenario. Do you think such a scenario is conceivable?
I’m not that pessimistic. The 20 percent of the Ifo Institute is an annual projection, not an annualized quarter. This means that the relatively robust first quarter is included, so that the economy would not get on its feet in the third and fourth quarters.

At the moment, almost all countries except Sweden are pursuing the same corona strategy: lockdown, bans on contacts and so on. There has never been an experiment like this. Could this strategy turn out to be a global mistake in the end?
Afterwards we’ll be smarter. Yes, there are voices that can be taken seriously and say that we unnecessarily stall the economy. Only: If we look at the infection curves and compare them with other flu waves, we see that the rise at Corona is much steeper. If we let it go, significantly more deaths would be unavoidable. So I think trying to flatten the curve so as not to overload the health system is the right strategy.

Finally, a personal question: It was not long ago that your colleague Peter Bofinger from Würzburg was the last Keynesian. But now conservative economists are also calling for massive government intervention. Ifo boss Clemens Fuest, for example, or IW boss Michael Hüther, who most recently spoke in favor of corona bonds. Do you sometimes feel like the last politician in the country?
Do not worry. There are still a large number of economists who think in terms of regulatory policy. In addition, I am just as pragmatic as my colleagues in this unique crisis that we are currently experiencing.

Mr. Feld, thank you very much for the interview.

More: EU summit: These are ideas for financing the EU reconstruction funds


Almost a fifth of the companies want to cut jobs

Berlin Daimler– HR Director Wilfried Porth didn’t gloss over anything: “Obviously something is breaking away at the moment that no one knows if it can be caught up,” the manager said last week. The carmaker had to accept a drop in profits of almost 80 percent in the first quarter, sales of the core brand Mercedes decreased by 15 percent. “The fact that we will need to adjust is obvious,” said Porth. He didn’t say the word job cuts. But even before Corona, Daimler had decided to cut up to 15,000 jobs.

The fear of jobs is back in Germany and the virus pandemic will leave deep marks on the job market. Every second company is already doing short-time work. According to a survey by the Ifo Institute, almost a fifth of the companies want to lay off employees or not to extend temporary jobs.

“The fear of jobs seeps in,” says Ifo economist Klaus Wohlrabe. The job cuts plans are apparently based on the concern of many companies that the restrictions on public life in the corona crisis will not end in May.

On average, the companies surveyed expected four months of partial standstill. 84 percent feel a drop in sales due to the corona crisis, only four percent register a growing business. According to the Federal Employment Agency (BA), almost every third of the 2.2 million companies with at least one employee who is subject to social security contributions have registered short-time work.

Previous employment forecasts are becoming more and more waste every day that the corona crisis continues. “For the labor market, we expect unemployment to rise sharply over the next few months. But many companies keep their people, you can see that from short-time work, ”says Enzo Weber from the Institute for Labor Market and Vocational Research (IAB).

BA boss Detlef Scheele expected a rise in unemployment by 150,000 to 200,000 people in April a month ago. The Nuremberg authorities will present the current data next Thursday.

Domestic demand collapses

There is hardly any improvement in sight if you look at the economic development: the purchasing manager index of IHS Markit has plummeted. In the survey, 75 percent of service providers and almost as many industrial managers said that their sales had shrunk significantly. Service providers’ sales fell more than ever in the 20-year history of this survey. “Both domestic and export demand has collapsed,” writes IHS Markit economist Phil Smith.

“Demand levels will not return to pre-crisis levels anytime soon,” says Sascha Haghani, head of the global restructuring practice at management consultancy Roland Berger. That’s about it GfKConsumer barometer, which measures consumer mood, plummeted to a record low.

“Sooner or later the companies will have to adjust their costs accordingly,” Haghani expects. Probably also through job cuts: According to the IHS, more jobs were cut in the service sector than at the height of the financial crisis recession in April 2009, and the reduction in personnel is also accelerating in industry.


The Ifo survey also shows how wide the shock waves are spreading in the economy: in industry and service providers, almost every fifth company wants to lay off employees or not to extend temporary jobs. It is 15 percent in retail, and two percent on construction that has so far been little affected by downtime. Leading economists such as the head of business practices, Lars Feld, are starting to adjust their forecasts for 2020 downwards.

After Chancellor Angela Merkel and the Prime Ministers decided a slow restart of the economy last week, he expects gross domestic product (GDP) to shrink by at least 5.5 percentage points in 2020. Even in the economic institutes, which predicted a minus of 4.2 percent for 2020 in their joint forecast two weeks ago, it is now expected that a five will be before the decimal point.

The IAB had anticipated a 4.7 percent decline in GDP in March, when the economy largely stands still for two and a half months and only normalizes by the end of the year. In this case, the number of unemployed could temporarily rise from the current 2.3 million to more than three million, the Nuremberg researchers predicted at the time.

A well-known restructuring expert expects Corona to increase unemployment to as many as four million people. Especially badly hit sectors such as tourism and gastronomy are affected, but also important branches of industry such as the automotive suppliers.

The government is obviously also assuming a long period of weakness on the labor market. For example, for all unemployed people who would slide into Hartz IV between May and December, the duration of the unemployment benefit will be extended by three months. “Those who are just becoming unemployed or who have recently become unemployed currently have little chance of finding a job again,” said Labor Minister Hubertus Heil (SPD).

In order to counter the allegations made by the unions, in particular, that politicians are more concerned with companies than with employees, the coalition committee also decided on Thursday night to increase the short-time work allowance – staggered according to the duration of benefits.

It is currently 60 percent of net income and 67 percent for employees with children. From the fourth month in Corona short-time work, employees whose working hours are reduced by at least half are now to receive 70 or 77 percent. From the seventh month, the rates increase to 80 to 87 percent.

In addition, short-time workers who take up another job can earn up to the amount of their previous monthly income. So far, this was only true for “systemically relevant” activities such as care or agriculture.


The gradual increase in short-time work benefits has met with criticism: “I would have preferred a faster increase, especially for low-wage earners,” said Sebastian Dullien, head of the Institute for Macroeconomics and Business Cycle Research (IMK). In a survey, 40 percent of employees who were on short-time work said that they would get by with the money for a maximum of three months.

Employers see “contribution club”

The decision met with a mixed response among the unions, which had hoped for a general increase to 80 or 87 percent from the start. “This protects many employees from existential hardships,” praised IG Metall boss Jörg Hofmann. On the other hand, the chairman of the Food, Beverage and Catering trade union (NGG), Guido Zeitler, declared that the increase was correct, but was too small and too late.

In the hospitality industry, employees could probably only expect 80 percent of normal net wages in October 2020. According to the NGG calculations, according to the new plans, a cook in Berlin will have around 1,070 euros instead of around 920 euros and short-time work from around 1,220 euros from the seventh month. “For hundreds of thousands of people with low incomes, the only thing left to do is to apply for Hartz IV,” said Zeitler.

IAB labor market expert Weber also criticizes the fact that the planned changes will not benefit employees in the low-wage industries in a very targeted manner. “In the end, industrial sectors that have long been in recession could benefit in particular.”

For Holger Schäfer from the employers’ institute of the German economy (IW), it is not at all clear which problem the government wants to solve with the compromise: “In the end, a lot of money is spent on a purpose that is not clearly defined.” According to Schäfer’s calculations, the BA would need 24 billion euros to send 4.5 million full-time average earners without children on short-time work for three months. The employment agency’s reserve is just under 26 billion euros.

The criticism from business was correspondingly harsh. Employer President Ingo Kramer praised coalition decisions such as help for restaurants and the easier return of losses for companies. But they would be overlaid by “spending money with a watering can”.

The employers’ association Gesamtmetall criticized that the decisions on short-time work were expensive and caused an enormous additional administrative effort at the BA: “There is great concern that when the economy restarts, the tax and contribution club will fall on the employees and companies,” said CEO Oliver Zander the Handelsblatt. BA boss Scheele said that he would have liked a “simpler regulation”.

Monika Schnitzer, a new member of the Council of Experts, told Handelsblatt that she could understand that the government wanted to expand short-time work benefits. “But I think the chosen way of increasing is problematic.” After all, many employers voluntarily increased to keep their employees. I am afraid that it will have a high share of deadweight effects. ”

Ifo President Clemens Fuest believes the decisions will stabilize consumer demand. They are therefore also “a suitable economic policy measure”. The same applies to the extension of the period of unemployment benefit

More: Tax cuts, premiums, aid: Germany’s economists argue about state aid


Climate policy is under pressure due to the corona crisis

Berlin It was not long ago that climate protection was a key issue. Worldwide, young demonstrators in particular took to the streets, Germany presented a climate protection law, the EU Commission a green deal.

But since the corona crisis made the headlines internationally, the issue has been difficult. Instead of thinking about the decarbonization of society and the economy in view of the increasing global warming, aid programs worth billions are adopted within a few days, which are primarily to prevent a complete collapse of the companies.

The Corona crisis will make the necessary climate-friendly restructuring of the economy more difficult than it will accelerate, partly because the necessary financial resources are becoming scarcer, the Cologne Institute for Economic Research (IW) recently stated.

The United Nations Climate Change Secretariat and the British government have now decided that the COP26 world climate conference will be postponed to the coming year due to the corona crisis. It makes no sense to bring people from all countries together in the middle of a pandemic, it was said late Wednesday evening. However, the fact that the climate conference is being postponed does not mean that climate protection is also being postponed.

COP stands for Conference of the Parties and should have taken place in Glasgow, Scotland this November. Now, it is said, the world climate conference, which usually takes place once a year, will probably take place in the middle of 2021.

Sustainable revival of the economy

According to experts, the obligation under the Paris Agreement for all countries to improve their national climate plans by 2020 still applies. Because the climate protection contributions of Germany, the EU and most countries have so far been far too weak.

This misses the common goal of the agreement to limit the global temperature rise to well below two degrees Celsius or better to 1.5 degrees Celsius. That is why the states have to tighten their contributions significantly. Now the focus should be on how the international community manages to sustainably shape the economic revival that was necessary after the corona crisis.

This is exactly the question that thoughts and business games of environmental associations have been dealing with for days. They are concerned that climate protection could fall by the wayside this year and are therefore working on papers to prevent this.

The decision made last night was generally understood, but at the same time demands were made not to neglect climate protection. “Economic stimulus packages have to protect us from the worst consequences of the consequences of the corona crisis and at the same time prepare us for other crises,” said Ann-Kathrin Schneider, Head of International Climate Policy at the German Federation for the Environment and Nature Conservation (BUND) immediately after the announcement of the postponement.

While the corona crisis “caught us cold, we can still contain the climate crisis,” said Schneider. Green responses to the consequences of the corona crisis for our economy could save the most catastrophic effects of the next crisis on the horizon, the climate crisis.

Long-term measures

The development and environmental organization Germanwatch also praised last week’s adoption of the supplementary budget in Germany as an important first step in combating the economic consequences of the corona crisis.

At the same time, Christoph Bals, political director of Germanwatch, warned that the forthcoming economic stimulus programs at national and European level should specifically strengthen health systems, the resilience of societies and the climate targets necessary to avert danger.

“We cannot fight an exponentially growing crisis by firing another exponentially growing crisis – the climate crisis,” said Bals. The investment stimulus should therefore be the start for the implementation of the European Green Deal.

All measures should be checked for their long-term sustainability and their contribution to the resilience of society, Bals demanded. “You must not cement outdated structures.”

From Germanwatch’s point of view, the first steps would include the immediate abolition of the funding cover for solar energy, the waiver of blanket distance regulations for wind power, and greater support for energetic building renovations. “It is absurd that Economics Minister Altmaier is slowing down important future industries instead of promoting investments there,” said Bals.

World at a crossroads

“The world is at a crossroads,” warned BUND chairman Olaf Bandt repeatedly in the past few days. The corona crisis shows “how vulnerable we humans are and how vulnerable our economic and social systems are”.

In this challenging situation, it is good that the federal government is handing over money to help quickly. Bandt called for a “green deal” for Germany: “Securing people, creating sustainable jobs, building a climate-friendly future with strong regional cycles.”

The conservation organization WWF also warned against “business as usual”. “We have to manage the overdue transformation with a fair structural change in our economy and infrastructures and align programs accordingly,” demanded Eberhard Brandes, Managing Director of WWF Germany.

Germanwatch also urged support for the countries of the global south. “The corona crisis threatens to have many more devastating consequences in the global south than here,” said Bals. “Germany and the EU have a duty to live up to their global responsibility and to support the poorest countries very quickly in containing and fighting the virus.”

2020 should be a decisive year in climate policy – driven by Germany and the EU. Neither the G7 presidency of the USA nor the G20 presidency of Saudi Arabia are expected to give any particular impetus to climate policy. Berlin will have the EU Council Presidency in the second half of 2020, which has been seen as a good opportunity to spur the world on to more ambitions.

New dynamism

Federal Environment Minister Svenja Schulze (SPD) had already announced that she wanted to use the presidency for a new dynamic in European climate and environmental protection. The EU also wanted to hold a summit with China in September. The environmental associations hope that the world’s largest (China) and third largest (EU) climate polluters will put pressure together to fight climate change.

The preparation of the Paris Agreement concluded in 2015 had been decisively driven by the rapprochement between the United States and China at the time. At that time, Barack Obama was still ruling in the United States. Today’s US President Donald Trump announced in 2017 that he would withdraw his country from the contract. The termination that has now taken effect will take effect at the end of 2020.

More: Public life is largely at a standstill. In the short term, this reduces emissions. But the crisis will slow ecological modernization.


Donald Trump’s Rediscovered Promise – Morning Briefing

Good morning dear readers,

in his 2016 election campaign Donald Trump Always an audience hit: he wanted to quickly, very quickly provide the country with new bridges, canals, roads and Internet lines. About all the affairs, staff changes and Kraftmeiereien its chaotic tenure However, the project has been somewhat forgotten. Well – it’s election campaign again and Corona time – the President still enchants Infrastructure program from his junk box of unfinished plans.

Suddenly he even wants to loosen up two trillion instead of one trillion; even its erratic Customs policy Trump now wants to relax for 90 days. Even his best friends know that the fight against the economic consequences of the pandemic cannot be won with intellectual laziness.

State Secretary for Economic Affairs Thomas Bareiß (CDU is installed today as the new government commissioner for medium-sized companies, according to the Handelsblatt.

In economic speeches on Sunday Praise for the middle class a standard set piece. But now, when the economy switches from one hundred to zero on command, they beat Family entrepreneurs Alarm. A separate survey shows that a third of those surveyed have already applied for short-time work benefits and another third are currently planning to do so.

At a total of 470,000 Applications for short-time work Germany is well represented – and the situation could deteriorate quickly because government aid does not arrive. Secretary of State for Economic Affairs will take care of this in the future Thomas Bareiß (CDU): According to our information, it will be installed today as the Federal Government’s new SME representative. What now, Mr. Bareiß?

They may benefit Family entrepreneurs from a completely different instrument of the federal government. For the first time in the history of the republic, the federal government guarantees new company debts – by way of a state-guaranteed one Corporate bond. This is where the firepower of the “Economic Stabilization Fund” comes in, which is 400 billion euros for guarantees from “Debt securities and liabilities” provides. According to our analysis, a number of companies are currently looking for liquidity on the capital market. And the rating agency S&P expects the proportion of companies in Europe that are considered to be “speculative” to go bankrupt from 2.2 to 8.0 percent.

Germany ‘s profile in the European policy is about as sharp as Claude Monet’s water lily pictures. The most striking feature of the current crisis policy is the one orchestrated with the Netherlands, Austria and Finland Resistance to corona bonds, against bonds from all EU countries. Talks surprisingly Michael Hüther, Head of the Institute of German Business, now plain text: “Without a joint crisis bond, I see black for the European Union,” he says in the “Tagesspiegel”. Hüther had spoken out against euro bonds in 2011, and now he praises such a “limited fiscal response to the corona crisis” Sign of solidarity. Italy’s Prime Minister Giuseppe Conte warns that Covid-19 is an “emergency that affects everyone” – Europe must show that it can find an appropriate answer with corona bonds.

Statutory health experts criticize the Bavarian Prime Minister Markus Söder after he was deprived of responsibility for medical care in the “Corona Pandemic Emergency Plan”.

The Bavarian Prime Minister Markus Söder is currently particularly well received in Germany, even north of the “Weißwurst Equator”. Only the health insurance doctors find him less intoxicating, after the CSU principal surprisingly found them in the “Corona Pandemic Emergency Plan” Responsibility for medical care has withdrawn. Association officials speak of “crowbar” and “panic reaction”. It is a matter of local “health care providers” who can instruct local doctors to relinquish personnel to core Corona practices and test centers.

Now what was built willfully will be destroyed, says Andreas Gassen, Head of the National Association of Statutory Health Insurance Physicians. There is nothing to be said for the bottlenecks in the protective equipment, prevention of the pandemic is a national matter that “failed here in total”. According to Gassen, he was happy not to have to live in Bavaria now.

That looks Markus Duesmann different. The new Audi-Boss has his first day of work in Ingolstadt today. The Bavarian enthusiast has a one and a half year exchange ban Ex-BMW board behind him and now he receives – due to the corona crisis – only a small remaining team. You keep a minimum distance of 1.50 meters. Also, you don’t want to work at Audi again as long Breathing masks and protective clothing next door in local hospitals and nursing homes.

With a retreaded management team (many come from BMW), Duesmann wants the Audi brand, which was somewhat battered recently, back in the competition – and thus in the Volkswagen group – bring up. The works council, like us in our small one, expects more courage to “lead through technology”, the old slogan Audi workshop report demonstrate.

The Beatles: The band broke up 50 years ago.

And then there are those Beatles, those pop chamber musicians who fell apart exactly 50 years ago. After all kinds of quarrels, which had to do with power games, finances and ego problems, came Paul McCartney in April 1970 officially out of the gang of four that had started exactly ten years earlier in Liverpool and had been baptized by fire in the Kiez in Hamburg. George Harrison and John Lennon had wanted to desert before him. It was just a band that broke up, Lennon condoled, “It is not the end of the world”.

But an unwelcome goodbye for the record industry, a pain that then with solo projects of the former “Fab Four” and multiple re-editions was tempered. “In this life everyone is brave who doesn’t give up,” McCartney left as a message.

I wish you a day with courage and humor. The Munich police have already proven that when asked about a child Exit restrictions for Easter bunnies praised the cunning of these animals. The Easter bunny combines hiding eggs with exercise in the fresh air, which is still allowed, teaches the orderliness: “Of course, he also keeps a minimum distance of 1.50 meters and washes his paws before and afterwards.”

Warm greetings to you

Hans-Jürgen Jakobs
Senior editor

Here you can subscribe to the morning briefing.

Morning briefing: Alexa


Corona virus: How home office can work

Dusseldorf In many offices, it is currently as empty as it is shortly after New Year: Numerous companies send employees to their home office for fear of the corona virus. So had SAP After an infection, a location in Saarland with 800 jobs was closed indefinitely.

Axel too Springer tightened the precautionary measures on Thursday after a confirmed coronavirus case at the Berlin location and will send its employees to the home office from Monday. BMW, Per seven Sat 1 and Vodafone in the meantime resorted to similar measures. Communication is largely digital.

Some providers of video conferencing and collaboration software use this exceptional situation to advertise themselves: They offer their solutions at reduced prices or even free of charge – in the hope of persuading customers beyond the corona crisis. It can be heard in the IT industry that interest and usage are increasing significantly.

The change is not so easy. In addition to the right technology, a different corporate culture is also required. “This is a forced test for the home office,” says Oliver Stettes from the Institute of German Business (IW) in Cologne.

It is not yet clear to the economist whether the corona crisis will later be reflected in the use of mobile working methods. However, companies can do a lot to ensure that the work also succeeds virtually.

Work-life balance meets sustainability

Home office is already part of the working world, at least for some of the working population. Four out of ten companies in Germany make it possible to work outside of traditional offices, as the IT association Bitkom has determined.

And while many employees are on their way because they want to separate work and leisure or seek contact with colleagues, almost half (45 percent) demand a legal right to work remotely.

“Usually the wish comes from the employees,” says economist Oliver Stettes. “Flexibility is the most important factor.” With regulations for home offices and mobile work, companies position themselves in the competition for the bright minds, which is why large corporations have prepared themselves for this in recent years.

In the course of the discussion about climate change, they can also book sustainability points when video conferences replace business trips. However, not all jobs offer such flexibility – the assembly line, for example, is not without presence.

At least the office work can be largely depicted virtually. There are solutions for video calls and virtual meetings that play presentations in parallel or allow documents to be edited together, almost as if you were sitting next to each other on the notebook. Microsoft and Cisco are even working on transcribing the conversations directly. As soon as the speech recognition in German is mature, a protocol could be available immediately after completion.

Just go to your private study and get started – in the experience of Computacenter manager Marc Herzmann, that doesn’t work. He is responsible for the digital workplace at the IT service provider in Germany and works regularly at various locations, including his own study.

“It is our practice to interconnect via video conferencing,” he says. But that has to be practiced. “If an employee has to go to the home office ad hoc, it is questionable whether this works.”

Good camera, proper lighting

On the one hand there is the technology: The employees need a powerful notebook and a reasonable camera, which small and medium-sized companies in particular cannot guarantee for everyone. A stable internet connection is also essential, which is not the case everywhere in Germany.

In addition, the right work environment is needed, says Computacenter manager Herzmann – including good lighting so that you can be seen. This also includes a tidy background: All conversation partners can see it in video conferences.

In the best case, as Herzmann emphasizes, video conferencing can certainly create proximity, especially with modern systems that, for example, automatically enlarge the image of the speaker and focus on the person. “A customer recently told me: It feels like we can toast with our coffee.”

On the other hand there are the work processes. “The best technology doesn’t work if there is no acceptance,” says Herzmann. “That’s why change management is needed.” The IT service provider provides instructions and videos on a portal that prepare employees for handling the technology.

It is only used if it is easy to start or find a virtual meeting. “You have to do it one time or another to make it work,” sums up the expert.

And last but not least, it is the corporate culture that counts. For example, while it is frowned upon to shuffle too late in a meeting, telephone or video conferencing can often only start with a delay because colleagues are late, the technology is not up to date or the children call between them. The video conferencing provider Zoom that skewers in a satirical advertisementwhich is probably not that far from reality.

“What is often underestimated: There are processes and routines in teams that cannot be changed easily,” says IW economist Stettes. He therefore does not yet believe that the corona crisis will lead to a permanent boom.

More: “Too many managers in a state of shock” – This is how managers master the corona crisis


Dax and Eurostoxx: The appointments of the day

Dusseldorf In the first three days of the week, fear of the economic consequences of the coronavirus pushed the Dax down by almost six percent or 800 points. The new virus had recently spread to Europe. Before the start of trading, brokers see the leading German index at the opening on Thursday almost three percent lower at 12,414 points.

Stock markets came under pressure again at night as US President Donald Trump failed to calm investors in a speech in the opinion of traders. Trump had warned of a panic in the United States, according to warnings from the CDC, the US health authority, about the spread of the novel corona virus. He doesn’t think spread in the US is inevitable. The President also emphasized: “Whatever happens, we are fully prepared.”

He did not rule out further travel restrictions due to the virus. Foreigners who have been to China in the past 14 days are currently not allowed to enter the United States. Trump said such restrictions could also be imposed on travelers from other countries where the virus spreads.

The Dax had initially recovered somewhat from the corona shock on Wednesday. The stock market barometer almost made up for initial losses of more than three percent. In the end, there was a minus of 0.12 percent at 12,775 points.

The MDax of medium-sized market stocks also struggled somewhat and finally fell by 0.69 percent to 27,127 points.

The individual values ​​focus on Thursday’s stock exchanges in Germany on Bayer’s annual balance sheet and ThyssenKrupp’s decision to sell the elevator division.

1 – Default from the United States

The US stock exchanges closed inconsistently on Wednesday after a ride up and down. Uncertainty about the economic consequences of the coronavirus epidemic dominated again, particularly in late business. The trigger was a message from the health authorities in the Nassau district of New York that 83 people had been put under surveillance who visited China and may have come into contact with the coronavirus. Governor Andrew Cuomo said, however, that the state has not yet had a confirmed case. The Dow Jones index of standard values ​​closed 0.5 percent lower at 26,957 points. In contrast, the technology-heavy Nasdaq advanced 0.2 percent to 8980 points. The broad S&P 500 lost 0.4 percent to 3116 points.

2 – Trade in Asia

The equity markets in Asia expanded their losses on Thursday. Growing fear of a pandemic depressed prices, especially in Japan. The only bright spot was the stabilizing stock market in China. At least in the People’s Republic, investors are betting on it. that the outbreak appears to be under control.

However, analysts warned against the all-clear for the financial markets: “The rising number of infections outside of China has certainly increased the risk of pandemics,” said Desh Peramunetilleke, head of micro-strategy at Jefferies in Hong Kong. “Current earnings estimates do not yet consider such a risk and are therefore prone to further downgrades.”

The 225-strong Nikkei index was 2.2 percent lower at 21,930 points. The broader Topix index fell 2.1 percent to 1,571 points. The Shanghai stock exchange was up 0.6 percent. The key companies index in Shanghai and Shenzhen gained 1.4 percent.

3 – UK-EU negotiations

The UK government presents its negotiating mandate this Thursday on its future relationship with the European Union. The approach is intended to restore Britain’s “economic and political independence” by the end of the year, it says in the mandate that the Cabinet in London adopted it on Tuesday. The details will be presented today.

If no agreement is reached by the end of the Brexit transition phase at the end of the year, a hard break threatens with serious consequences for the economy.

4 – The top cooperative institute DZ Bank presents annual figures

They should turn out well. The bank had already made it clear that it had earned more in 2019 than in 2018: The pre-tax profit should exceed the two billion euro mark. In the previous year, the bank earned 1.4 billion euros before taxes. Above all, the profit goes back to their lucrative subsidiaries such as the fund company Union Investment and the insurer R + V. But the co-board members Uwe Fröhlich and Cornelius Riese also want to explain how much the core bank has achieved itself.

5 – Bavarian presents its annual balance sheet

The Leverkusen-based chemical group presents its business figures for the past year. Bayer reported sales of around EUR 32.8 billion in October for the first nine months of the fiscal year. However, the group is currently in a difficult phase due to the legal problems caused by glyphosate in the USA.

At Bayer, there is a change at the top of the supervisory board: Werner Wenning will step down from the supervisory board at the end of the general meeting on April 28. Supervisory Board member Norbert Winkeljohann is to succeed the 73-year-old. Analysts were not yet completely convinced of the personnel.

6 – Thyssen-Krupp decides on the sale of the elevator division

After the Finnish rival’s departure Kone Two more consortia of financial investors are vying for the most profitable division of the Ruhr group. The supervisory board wants to decide on Thursday who will be awarded the contract. The bids are said to be up to 16 billion euros. This could make the transaction the largest private equity deal of the year.

Company dates on February 27

  • 5:15 a.m. Great Britain: Standard Chartered, Years
  • 07:00 a.m. Germany: Alstria Office Reit AG, annual figures
  • 07:00 a.m. Germany: Aixtron, Years
  • 07:00 a.m. Belgium: Anheuser-Busch InBev, years
  • 7:30 a.m. France: SCOR, annual figures
  • 8:00 am Great Britain: British American Tobacco, annual figures
  • 8:00 am Great Britain: Reckitt Benckiser, Years
  • 10:00 a.m. Germany: Aurubis, Annual General Meeting
  • 10:00 a.m. Germany: Dürr AG
  • 11:00 a.m. Germany: Frosta, Balance PC
  • 11:00 a.m. Germany: Ahlers AG, annual figures
  • 5:35 p.m. France: Lagardere, Years

Company dates on February 27 (no time)

  • France: Carrefour, Years
  • Great Britain: Rentokil Initial, Years
  • Great Britain: Campbell Soup, 2nd quarter
  • Great Britain: Aston Martin, annual figures
  • Germany: TAG Immobilien, annual figures
  • France: Engie, Years
  • Spain: Ferrovial, Years
  • France: Dassault Aviation, years
  • France: saffron, annual figures
  • France: LafargeHolcim, Years
  • USA: Best Buy, annual figures
  • UNITED STATES: Edison International, 4th quarter
  • USA: Dell, 2nd quarter
  • Germany: Kuehne & Nagel, annual figures

Dates economic activity on February 27

  • 14:00 Germany: Conference “Low Interest Rates – Why? How long? Consequences? “. The organizer is the Center for Financial Studies, discussants including: Carl-Christian von Weizsäcker and ex-ifo President Hans-Werner Sinn

Other dates

  • 9:30 a.m.Luxembourg: ECJ report on advertising in online pharmaceutical trade. A Dutch mail order pharmacy was sued for unfair competition after an advertising campaign in France. The advertising materials used are prohibited there, but permitted in the Netherlands. The European Court of Justice should examine the situation under EU law. The responsible Advocate General will present his Opinion today.
  • 10:00 a.m. Germany: Comparative study on the economic potential of the Ruhr Area Institute of German Business (IW) and Ruhr Research Institute Rufis have examined how the Ruhr Metropolis compares to other large economic regions – such as Berlin-Brandenburg, Munich or Frankfurt / Rhein-Main – there it is.

Here is the page with the Dax Course, here is the current tops & flops in the Dax, current short sales of investors can be found in our Short sales database,


Better opportunities for people with disabilities

Berlin State Minister for Digital Affairs Dorothee Bär became clear when the Federal Government’s Disability Representative, Jürgen Dusel, handed over his recommendations for participation to the Federal Government at the end of last year. “We have to use digital change to open opportunities for people with disabilities to participate,” Bär said at the time.

The Institute of German Business (IW) has now examined the potential that lies dormant here in a study that is exclusively available to the Handelsblatt. Core result: Companies that already rely heavily on digital technologies are more likely to employ people with disabilities than companies unrelated to digitalization.

In mid-2019, the Cologne-based researchers inserted corresponding questions into their IW personnel panel – a representative online repeat survey among HR managers. In contrast to the official statistics on the employment of severely disabled people, which only takes into account companies with at least 20 employees, smaller companies were also recorded.

As the survey among 1,200 HR managers showed, a good 55 percent of companies have employed at least one person with a disability in the past five years – at the time of the survey it was only around 46 percent. The proportion increases not only with the size of the company.

The researchers have also determined that intensive use of digital technologies such as online sales platforms, cloud services, virtual reality glasses or the Internet of Things significantly increases the likelihood that a company will employ people with disabilities. However, a significant effect can only be observed when a company is already heavily digitized.

Support in everyday work

Around 30 percent of companies that have employed people with disabilities in the past five years also see digitalization as new opportunities for the employment of people with disabilities. On the one hand, this is about hiring additional workers with a handicap, on the other hand, it is about making work easier for people with disabilities who are already employed.

Mobile work devices such as notebooks and tablets, which enable people to work anywhere, or online communication services for the exchange of information in the team of HR managers are already seen as a great relief to make everyday work easier for people with disabilities. Every fifth company uses digital technologies to support people with disabilities in their everyday work.

The companies surveyed by the IW have employed people with a physical disability, as well as people with visual or hearing impairments, significantly more frequently than people with a learning, intellectual or psychological disability in the past five years. Only a good seven percent of those responsible for human resources stated that they also worked or worked for them with employees with mental disabilities.

This is striking in that the number of sick days caused by a mental illness and the number of severely disabled people with personality or behavioral disorders have risen sharply in recent years, write IW researchers Christoph Metzler, Anika Jansen and Andrea Kurtenacker. One explanation could be that external support measures are aimed more at people with physical disabilities than at employees with mental disabilities.

As a warning signal, the study authors consider that just under six out of ten companies that have experience with the employment of people with disabilities feel adequately informed about the design of workplaces suitable for the disabled and possible aids. Only 45 percent said they had sufficient information to recruit new employees with disabilities.

Employment boom also benefits people with disabilities

Overall, people with disabilities have also benefited from the employment boom in recent years. According to the Federal Employment Agency (BA), the employment rate of severely disabled people between the ages of 15 and 64 has increased from 41.6 percent in 2005 to 49 percent in 2017. However, it was still significantly below the rate in the population as a whole (78.2 percent).

Employers with at least 20 employees are legally obliged to employ severely disabled people in at least five percent of their jobs. Otherwise a compensation levy staggered according to the size of the company is due.

In 2017, the mandatory quota of 4.6 percent – 0.1 percentage points less than in the previous year – was not met. The share in the private sector was 4.1 percent, in the civil service 6.5 percent.

More: Every second employee of the tea manufacturer Shuyao is severely disabled. The founder Nicola Baumgartner shows how inclusion can work.