Coronavirus

Corona virus in France: The German economy is worried

REUTERS / Charles Platiau

In the spring, France was one of the countries hardest hit by the pandemic, alongside Spain, Italy and Great Britain. Other countries are now sad leaders in terms of infection and death rates, but the coronavirus is still far from defeated in Europe.

In France, around 10,000 new infections are currently reported every day. This means that there are currently more cases than at the first peak of the pandemic in April. While at that time up to 1,400 people per day died after being infected with the novel coronavirus, the currently recorded deaths remain in the double-digit range.

In France, the economy slumped by 13.8 percent

Something similar is currently taking place in Germany – albeit at a significantly lower level. Although the number of new infections has also increased here since the beginning of August, with around 1,500 cases a day it is still significantly lower than in France. And this despite the fact that Germany has around a quarter more inhabitants than its neighboring country.

In both countries, the economy slumped massively as a result of the pandemic and lockdown. In France, according to the Insee statistics office, it shrank by 13.8 percent in the second quarter, in Germany it was “only” minus 9.7 percent. The difference could be related to the different levels of restrictions during the lockdown in the two countries.

While the unemployment rate rose massively in some countries due to the pandemic – in the USA, for example, it has now risen to 15 percent – it has remained relatively low on both sides of the Rhine. In Germany it was last at 6.4 percent, in France at 7.1 percent. But this was mainly due to the widespread use of short-time work and state aid for companies. But short-time work in France – unlike in Germany – expires at the end of October.

In France there is great concern that a lockdown may be necessary again

France’s economy is broadly based, but the world’s most popular holiday destination is also suffering from the drastic collapse of the tourism industry. Economists expect an economic slump of eleven percent for the year. The French government wants to fight the recession with an economic stimulus package worth 100 billion euros. Money should flow into future technologies, organic farming and environmentally friendly energy policy, among other things. In addition, jobs are to be secured with the package, especially among low-skilled people and young professionals. President Emmanuel Macron also wants to use the investments to reform the French economy and make it fit for the future.

But there is great concern in France that a lockdown might be necessary again. It was not until Sunday that the government of Israel decided again in view of the increasing number of infections and despite great resistance from the economy.

France is the largest economy in the EU after Germany. If the neighboring country does not get back on its feet quickly, that should also worry Germany. Both nations are closely linked economically, for example through the European aircraft manufacturer Airbus. In addition, France is the most important German trading partner in Europe. Last year, goods worth 106.7 billion euros were exported to the Grande Nation – more than to China. The French are the second most important buyers of German products.

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