The German economy is resuming activity. The line of business is ... 11:30 on May 14th.

In Europe, strict restrictions have been gradually eased to prevent the spread of the new coronavirus, and the movement to resume economic activity is gradually expanding. Against this backdrop, Europe's largest economic power, Germany, has launched a major measure to relax restrictions. As the fight against viruses continues throughout the world, Germany moved to a major easing by cutting the lead of major European countries. The industry was still the main line of demand for economic recovery. (Yoshiguchi Yamaguchi, Director of Berlin Bureau, Teruyuki Kurihara, London Bureau Reporter)

The first choice was ...

German Chancellor Merkel announced on 6th this month that it will substantially ease restrictions that have been in effect since March. He allowed all domestic stores to resume operations, and said that restaurants, hotels, and movie theaters could judge the gradual restart for each state while looking at the infection status.

Germany already has more than 170,000 people infected and more than 7,700 dead. Under such circumstances, the German government decided to significantly relax the restrictions because the number of new infections has been on a downward trend since the restrictions were partially relaxed beginning on the 20th of last month.

The partial easing of restrictions that began last month allowed the reopening of small and medium-sized stores less than 800 square meters. However, at this time, some stores were allowed to resume operations regardless of the size of the store area.

A car dealership. The inclusion of automobile dealerships is a clear indication of how important the German government is to reactivate the automobile-related industry.

1 in 7 is in the automobile industry

The automobile industry is known for its wide base. It takes a lot of parts to make one car, and a lot of work is involved from production to sales.

According to the German Automobile Manufacturers Association, in Germany it is estimated that one out of every seven workers has a car-related job.

Deputy Director Juncker
"It is an industry that has a very decisive meaning for the German economy."

Don't neglect infection measures after resuming

At the end of last month, I visited Wolfsburg, a two and a half hour drive from Berlin, the capital, to report on the reopening of car dealerships. It is a "castle town" with the headquarters of Volkswagen, the largest automobile manufacturer.

The first thing I noticed when I visited a store that had resumed business after an interval of one month was the disinfectant gel and thin rubber gloves that were installed at the entrance.

The handles of the exhibited vehicles were sterilized frequently. It is said that measures must be neglected so that customers can come to buy with peace of mind.

The store manager was looking forward to a recovery in sales.

Buff Bites, Manager
“I was very emotional when I reopened. If I knew that hygiene management was thorough, customers would surely come back.”

Changing car production site

Automobile production resumed at the same timing as the resumption of sales at dealerships. The assembly of cars was not subject to government restrictions, but automobile companies were forced to suspend production in Germany due to factors such as the suspension of sales at dealerships.

Among these, Volkswagen resumed production at the head office factory in late last month. However, the situation inside the factory has changed significantly.

The layout was changed so that the employees could work while keeping a certain distance from each other, and production started at a level of about 10% at the time of full operation.

Still, the company emphasized the significance that "a gradual resumption will be an important signal for the German economy as a whole".

"Successful experience" to aim again

Another point that came to light when we covered the automobile industry is the German employment maintenance system. It is a system in which the government provides at least 60% of the reduced wages to employees who have lost their jobs due to the economic downturn through their employers.

This system was used by many companies when they were hit by the Lehman shock and helped to maintain the employment of employees. It has also been pointed out that for companies, by continuing to employ employees, it became possible to suddenly increase production during the recovery phase of production, which was one of the factors behind the relatively rapid recovery of the German economy.

The German government decided to ease the requirements of the system and increase the amount of payment this time, in order to make use of the experience at that time. Previously, employers who applied for less than one-third of the total number of employees could apply, but this has been relaxed to more than 10% of the total, and more Allowed companies to apply.

Furthermore, for employees whose working hours have decreased to less than half, the ratio of benefits has been raised to 70% of the wages reduced from the 4th month and 80% from the 7th month.

The amount of money that Germany has invested in this system this time is approximately 1.2 trillion yen in Japanese yen. 750,000 companies have already applied for the system. The benefits are well over 10 million, far exceeding the Lehman shock's 3.3 million in 2009.

Utilization of the system spread over the hillside

The use of the system is expanding to companies that deal with automobile manufacturers.

About 20% of the sales of industrial fan manufacturers in southern Germany have so far been directed to automobile manufacturers. However, as a result of the spread of the infection, automakers stopped production all at once, resulting in a sharp drop in orders.

The company took steps to reduce the number of working hours for half of the 6,700 employees in Germany in an effort to maintain their employment. However, about 700 people, especially those who are involved in the production of fans for automobiles, have lost their jobs and have been forced to take a temporary leave from work to wait at home.

However, it means that employees are not dismissed because they can use the national system to receive benefits.

Brandle CEO
"The employees are excellent. I would like them to continue working after the crisis. Without this system, I would have had to lay off. If I received an order, I would be an employee immediately." You can get them back to you and you have the flexibility. "

Prime Minister remains alert to the second wave

"We have overcome the initial phase of the spread," said Merkel, who announced a major easing of the restrictions.

I feel that the number of people walking around in the central part of Berlin, the capital city, has increased dramatically compared to March when most of the shops were closed and people were crowded. The flower shops and beauty salons have resumed business, and the liveliness and colors of the city are gradually returning. However, if the infection spreads again, the restrictions will soon be restored.

"We must remain cautious," Merkel said, and she remains alert to the second wave of infection.

Junker of the German Institute for Economic Research points out:

Deputy Director Junker
"If we can overcome the virus, the German economy is likely to recover relatively quickly. The question is when this crisis will end."

What is the future of Germany, which has taken a big step toward normalization while the end of the infection cannot be predicted? Attention is focused on the trends in Germany, which can affect the future of the world economy as well as Europe.

Yoshihiro Yamaguchi, Director of Berlin Branch Entered in
2008
Hakodate station, Sapporo station, International department, German politics and society

Teruyuki Kurihara, reporter for the London branch , joined the economic department in
1999
, and is currently in charge of the European economy.