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Germany set to recover faster

By CHEN YINGQUN | China Daily Global | Updated: 2020-06-10 09:30
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Employees work on the A3 and A4 production lines of the German car manufacturer Audi in Ingolstadt, Germany, on Wednesday. ANDREAS GEBERT/REUTERS

Milder impact from outbreak, stability will see it fare better than neighbors, analysts point out

Although there will be no quick recovery for Germany after the COVID-19 pandemic, the country's political situation is likely to be more stable than before and its economy will pick up quicker than elsewhere in Europe, analysts said.

Germany has escaped a high death rate in the coronavirus pandemic while avoiding a strict nationwide lockdown, something that had been imposed in many European countries. There were a total of 184,543 confirmed cases in the country, including 8,711 deaths, data from the Robert Koch Institute showed on Tuesday.

Tian Dewen, the deputy director of the Institute of European Studies at the Chinese Academy of Social Sciences, said Germany's political situation, which was divided by issues including populism and refugees, has been more stable during the pandemic, as the whole nation has been making joint efforts to counter the virus.

Since the beginning of the pandemic, German Chancellor Angela Merkel's center-right Christian Democratic Union, or CDU, has seen its poll ratings climb due to the coalition government's well-regarded response to the outbreak.

"Germans have a strong sense of cooperation and they have done well in fighting the virus," he said. "Merkel's prestige has also been strengthened during the pandemic, which could reduce political uncertainty especially as Merkel's ruling party is still searching for a successor to her."

The picking of a successor for Merkel as well as the leader of the CDU has been delayed by the virus. The current party chief Annegret Kramp-Karrenbauer, who had been widely seen as Merkel's successor, made a surprise decision earlier this year that she was giving up her role as party chair as well as her ambition to run for the chancellorship.

Meanwhile, Merkel last week firmly rejected suggestions that she might seek a fifth term at the helm during an interview with ARD television. When asked whether she would consider running again, she said: "I'm not considering it."

Tian said that Merkel's departure after this term is a settled issue and the successor will be picked soon.

"The good impression CDU has made will help make the handover of leadership more smooth," he said.

In the economic sphere, the German government presented an economic stimulus package last week that is worth 130 billion euros ($146 billion) for 2020 and 2021, to counter the economic consequences of the pandemic.

Tax reduction

The single biggest measure is the reduction of the value-added tax from 19 percent to 16 percent until the end of this year, which would cost around 20 billion euros, according to the government.

Chen Fengying, a senior researcher on the world economy at the China Institutes of Contemporary International Relations, said that Germany had effectively controlled the spread of the virus and hadn't imposed a nationwide lockdown during the pandemic, so its economy is not hurt as badly as those of other European countries.

"So, although no quick recovery is in sight yet, the foundations of Germany's economy are still solid, and it will pick up faster than other European countries," she said.

In a related development, the Ifo Institute, a Munich-based economic institute, said on Monday that the production levels of German manufacturers are expected to drop further in the coming three months, although this will be at a slower pace than before.

Also, Chen said that as Germany is the largest economy in Europe and is closely related to the destiny of Europe, European countries will have to work together for an economic recovery.

Tian said that Germany had been undertaking industrial restructuring in the past few years, but it will take a long period to achieve progress. So, in the short run, the economic stimulus will still be the main way for recovery.

Xinhua contributed to this story.

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