Economics: "The effectiveness of lockdowns is no longer so great"

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The so-called economic wise men are no different in the pandemic than the rest of society: They disagree on the assessment of the crisis policy.

With regard to the lockdown measures in particular, there are quite different opinions in the Advisory Council on the assessment of macroeconomic development.

The body lacks clear leadership after the resignation of the previous chairman, Lars Feld, whose term of office was not extended in February because the federal government was unable to agree on it.

The now four-person committee has not yet elected a new chairman.

"I think the easing is premature," said Achim Truger when presenting the economic forecast to the expert council.

"I think the risk that we will have high numbers of infections again over Easter is quite high."

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His colleague Volker Wieland, on the other hand, expressly opposed a fundamental extension of the lockdowns.

"You have to see that people are tired and the effectiveness of general lockdowns is no longer so great," said Wieland.

He therefore recommended that politicians instead rely on other measures such as increased testing and, above all, vaccinations.

Veronika Grimm, on the other hand, positioned herself in the middle.

When it comes to the question of whether to open or close the affected companies, there is no black and white.

"Thinking in black and white only polarizes unnecessarily," said Grimm.

All four economies admitted that their forecast presented on Wednesday is fraught with great uncertainty, mainly because of the questionable progress in vaccination.

Whether and how strong it will go up again for Germany this year depends above all on how quickly it is now possible to vaccinate the majority of the population against the corona virus.

Only 3.1 percent growth in 2021

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The Council of Economic Experts is currently assuming that the economy will grow by a total of 3.1 percent this year.

Last fall, the then five professors were more optimistic and expected a plus of 3.7 percent.

In 2022, growth is now expected to be 4.1 percent.

The fact that the upward trend is now much slower is mainly due to the fact that the economy is also currently divided.

"Despite the ongoing lockdown, we are far from the severe economic crisis of last spring," said Wieland.

Foreign trade and industrial production in particular are currently doing so well that in some cases they have almost reached the pre-crisis level again.

On the other hand, however, the entire service sector, retail and hospitality industry has been standing still for months.

Source: WORLD infographic

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Depending on how long these closings still last, the forecast of the economic modes could also deteriorate significantly in the course of the year.

If the lockdown lasts a quarter longer than assumed, it will probably cost one percentage point growth, said Monika Schnitzer.

"A third wave of infections is of course a major risk, as it could postpone recovery again," warned Wieland.

"We have to prevent this by significantly accelerating vaccination and testing."

Veronika Grimm emphasized that an increase in the current vaccination rate by around 50 percent is necessary in order to achieve the federal government's goal of vaccinating 70 percent of the population by autumn.

To achieve this, not only would the vaccination centers have to be used to capacity as soon as possible, but GPs and specialists should also be involved.

It now depends on the speed of vaccination

However, the current suspension of vaccinations with AstraZeneca's vaccine could lead to further delays, as the other available vaccines are much more difficult to administer in doctors' offices.

“It is not, however, that the unavailability of AstraZeneca postpones the goal,” said Grimm.

The hope then lies in the availability of further vaccines.

However, the committee does not really agree on its assessment of the federal government's vaccination progress to date.

"There is light and shadow in the vaccination strategy," said Grimm.

You have to analyze in detail what went well and what went bad. In Germany, mobile vaccination teams were used to a greater extent than in other countries, including in old people's and nursing homes.

This will now lead to a much more pronounced drop in the death rate, but it will take a little longer, so that other countries are ahead in terms of the number of vaccine doses administered.

Schnitzer also said that she did not want to “condemn” politicians, that transparency was needed, in particular how the decisions were made regarding the procurement of the vaccine.

"Nevertheless, I would have liked a more flexible vaccination strategy," said Schnitzer.

Truger was already clearer: "My impression was that the basic problem was getting the vaccines," he said.

Wieland was the most critical.

“You have to look at the result,” he said.

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"A look abroad shows that we cannot be satisfied with the result." Other countries such as the USA, Great Britain and Israel are significantly faster with their vaccination campaigns than Germany.

“We have to learn from the best,” said Wieland.

"We weren't the best this time."

Federal Minister of Economics Peter Altmaier (CDU) also emphasized in view of the forecast of the economic methods that one must now pick up speed with the vaccination.

"Rapid vaccination progress and the consistent use of rapid tests are two decisive levers in this phase of the pandemic, so that things can also go up for the entire economy," he said.

Truger: Don't stop helping companies too soon

Achim Truger warned against letting the aid for affected companies run out too early.

"Should the lockdown be extended, the aid would of course also have to be extended," he said.

So far, the bridging aid is limited to the middle of the year.

"It would be a shame if, now shortly before the pandemic is hopefully finally defeated, the aid is reduced too quickly," said Truger.

At this point too, Wieland took a different position.

"If our forecast is correct, you come to a phase in which you have to take care that growth is possible in the long term," he said.

Then you have to end aid that was meant for the acute crisis, then you also have to allow structural change.

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