Home World Angela Merkel nightmare: Business leaders blast Chancellor as Covid chokes economy

Angela Merkel nightmare: Business leaders blast Chancellor as Covid chokes economy

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Germany suffered its largest economic contraction since 2009 last year due to the coronavirus pandemic, with gross domestic product shrinking by six percent. Industry leaders are now calling on Ms Merkel to publish a strategy allowing pandemic restrictions to lift to help boost the economy.

Oliver Rakau, chief German economist at Oxford Economics, criticised Ms Merkel’s Government for a “lack of a prospect” for businesses to open up.

He said: “It’s the lack of a prospect of an opening that’s for sure, especially in the light of the frustratingly low vaccination progress.”

Citing frustration at “very slow” financial aid, he added: “For instance much of the November help hasn’t been paid until early January so of course for businesses that are running low on cash, have no liquidity coming in because their business is closed, that is a big deal.”

Ms Merkel announced €10 billion would be offered to businesses affected by lockdown restrictions in November, but firms reported issues accessing the funds throughout the winter.

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Speaking to The Times, Mr Rakau then targeted Germany’s slow vaccine rollout and suggested “recovery will really only take off towards the end of the second quarter”.

Due to the EU’s issues with securing coronavirus vaccine, the roll out of jabs has been slow across the bloc’s member states.

Germany has vaccinated the most people out of the 27 member countries, at around 4.28 million doses.

Mr Rakau added: “The bigger concern, in a way, is not so much the recovery path but it is how many firms are still there once the recovery begins.”

Ms Merkel’s Government and German states have currently implemented a coronavirus lockdown until at least March 7, with all shops and non-essential businesses closed.

The Chancellor agreed on Friday restrictions may not be lifted until cases are less than 35 per 100,000 people, which is well below the German Government’s previous target of 50 per 100,000.

Peter Altmaier, economy minister, also suggested businesses may need to wait even longer to open should restrictions be lifted, warning “business can’t flourish if we get a third wave”.

He made the remarks after meeting industry groups furious at the lack of clarity over opening, where he agreed to look at publishing plans to open up the economy in the coming weeks.

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It follows a small protest outside the German economy ministry in Berlin over businesses struggles in lockdown on Tuesday .

The demonstrators demanded an opening strategy immediately”, warning that it’s already “five past 12” for small and medium-sized business , referred to as the Mittelstand.

Trade groups and business leaders have accused Ms Merkel and finance minister Olaf Scholz of bringing a “water pistol” instead of a fiscal “bazooka” to combat economic issues, claiming emergency aid is not helping.

Germany recorded 9,598 cases and 538 deaths within 28 days of a positive coronavirus test yesterday.

In total the European powerhouse has reported 2,362,364 cases and 67,074 deaths.



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