A German expert expects a "wave of bankruptcy" for companies in the event of the extension of the second closure
The head of the German DIW Institute for Economic Research, Marcel Fratzscher, expected dire consequences for the German economy, in case the closure related to the new Corona virus (Covid-19) was extended.
"The longer it takes, the more companies that reach the limits of their capabilities, and the more companies declare bankruptcy," Fratzscher said in statements to the German newspaper, Augsburger Allgemeine.
Fratscher said that the second wave of bankruptcy will be more difficult than expected, pointing out that: "The question now is not whether there has been a wave of corporate bankruptcies, but when?"
He emphasized that this also threatens to increase unemployment.
Despite this, Fratscher stressed that it is better to extend the closure in case the number of infections continues to increase.
Frachscher pointed out that the labor market has gone through the crisis in a way that is less good than what statistics show, explaining that about 600,000 employees covered by social security lost their jobs in 2020.
He added that there are also about 850,000 employees of low-income professions who did not appear in any of the unemployment statistics, and do not have the right to unemployment benefits or part-time work benefits, "noting that a large number of self-employed persons, whose total number is about 2.5 million people, incurred huge losses.
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