“Me thank you Markus Quint, Communication Chief at the Messe (Exhibition Center) in Frankfurt, no longer needs to look this way when exploring a 440,000 square meter empty hall from the terrace on the 22nd floor. ” When the pandemic broke out last spring, Messe, which welcomed about 2.5 million visitors in 2019, had to shut down digital sorts in every business bar. Global revenues (Messe has 29 subsidiaries) plummeted from € 736 million ($ 870 million) to € 257 million. Most of the 1,000-plus Frankfurt staff continued Kurzarbeitergeld, Germany’s highly imitated layoff plan.
The recovery sparks as the Germans are preparing to go to polls on September 26th. Quint said the Messe could have “cryed with joy” in July when it reopened for the first physical exhibition at the bicycle parts manufacturer’s trade fair. Larger shows are underway, including the resurrection of the famous Frankfurt Book Fair next month.
Still, the threat from covid-19 has not evaporated. In the case of Messe, border restrictions and quarantine regulations once made it nearly impossible for large delegations of Asian and American visitors to attend the show. Other companies are afraid of the resurgence of some contact restrictions amid the fourth wave of infection and anxiously low immunization rates in Germany.
Clements Fest of the Ifo Institute for Economic Research in Munich said the temporary disruption of the supply chain is having a more serious impact on Germany’s recovery. The global semiconductor shortage is ruining a strong German car maker. Completely 70% of all German manufacturers state that everything from aluminum to paper is lacking.Highly globalized Germany — its total trade value was 88% of Germany GDP 2019 — Especially exposed. Ifo became more pessimistic, although he had previously predicted that the economy would reach pre-crisis levels at the end of 2021.
It’s no wonder German companies are looking at the campaign with a keen interest. In some cases there are also serious concerns. Jürgen Formann, CEO Infraserv Höchst, a chemical service provider based in Frankfurt, has the highest German electricity prices in Europe, putting a heavy burden on the industry. Some of Germany’s influential family businesses are afraid of tax increases. “We don’t have to be pessimists to predict that we’re heading in the wrong direction,” says Vormann.
In consensus-oriented Germany, none of the likely coalitions will result in an economic collapse. But the difference between the party platforms is tricky post-election negotiations, especially as polls suggest that only ideologically confused tripartite coalitions are feasible. Professional Business Liberal Democratic Party (FDP) And a conservative Christian democracy block (CDU/CSU), For example, the Social Democratic Party (SPDAnd Greens wants the rich to have a wealth tax and a higher income tax. All parties agree on the need to speed up climate protection, but the balance between market mechanisms and regulations is very different.
This issue interacts with more familiar issues. The total of the parties is not totaled. German Institute of Economic Research (IW) Believes that by 2025, growing demand for state-owned pension schemes, additional defense spending and some other new costs could reach a cumulative total of € 263 billion. But of the major parties, only the Greens promised to say that they were profit-neutral. NS FDPTax cuts could add € 75 billion, GDP, In the red. There is no party manifesto that survives the coalition negotiations. However, a constitutional brake on Germany’s public debt, which came into effect in 2016, limits the annual deficit to 0.35%. GDP.. All major political parties forbid Greens from saying they want to comply, but growth alone cannot generate enough cash to do so.
States parties always make dangerous claims about taxation and spending, says Thomas Obst. IW.. He is even more wary of not facing the challenges of Germany’s vital statistics.As the baby boomer generation retires collect Throughout the 2020s, subsidies to pension schemes, which have already consumed 30% of the federal budget, will skyrocket without reform. At the debate aired on September 12, only Armin Laschet CDU/CSU The candidate acknowledged the urgency of the problem. Olaf Scholz, SPD The front runner put his confidence in expanding the workforce and set it aside.
Another test is to meet the investment demands posed by German climate goals, such as grid expansion and building insulation. The private sector can account for much of that slack. Renewing German planning rules and local government labor practices will help. However, some estimates indicate that demand for the federal budget will be close to € 50 billion annually.
If that also seems incompatible with debt braking constraints, there may be room for political amendment. To be sure, the brake tweaks that Greens wants are not beginners, as each of the two chambers requires a majority of two-thirds.And a few months before the European Commission plans to start the review EU‘NS Financial rules, NS CDU/CSU Afraid to be able to agree on German proficiency now Encouragement Les Autres (See Charlemagne).
But most parties will probably get angry with what Obst calls the “second best solution” of setting up an out-of-budget investment fund that could avoid debt braking. And there are signs of subtle changes.A few CDU/CSU The numbers upset colleagues by questioning the rigidity of debt brakes in an era of cheap money and imminent investment needs. and, FDP Party leader Christian Lindner has recently emphasized that it is not ideologically tied to a balanced budget. SPD, Currently leading polls, and Greens. This trio has the potential to form a left-wing “traffic light coalition” coalition. This is the most reasonable result if the current vote is backed up on election day.
This represents a broader change in the German economic debate. “Everyone knows we have to transform Germany … and for digitization and decarbonization, it’s all an investment,” says Otto Fricke. FDP Budget expert. The division between parties regarding budget planning, monetary policy and European spending does not seem to be as strict as it used to be. Public debates are more tolerant of what was once a quirky view. As always, pre-election campaign plays do not rule out the compromises that ultimately occur after the election. ■■
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This article was published in the printed European section under the heading “Spinning the wheels”.
The war party’s plans for the German economy are full of holes
Source link The war party’s plans for the German economy are full of holes