Monetary Policy of Germany
Introduction
The budget also includes the protection towards rent payers who are unable to meet their bills, with defaulting due to the virus ruled out as a reasonable ground for eviction. Rules for short time work would be altered and the budget also says that it aims to stop companies from removing their employees from their payroll if the employee does not work for sufficient hours.
The government will make sure that the rules for insolvency would be made lax and while public traded companies will be permitted to keep their stakeholders meeting via video conference rather than holding live meetings.
The Economic Minister Peter Altmaier said that the government is going to do only so much to help the companies to survive but not for them to plug the gaps of the lost turnover.
The restaurants in Germany were made to close down because of the virus but not eateries and they are also given permission to provide home delivery and only for collection but not dine in as they were closed so that people are not in groups.
This helps the economy at least a bit and it is also for the greater good of helping people during difficult times.
Lufthansa airlines which is Germany’s flag ship airline is in survival mode because it has stopped around 95 per cent of its flights. Lufthansa has done this a week earlier than its competitors, so they are in a worse situation compared to their competitors.
Major companies like Volkswagen and BMW have announced the closure of their plants to halt the spread of the virus whereas the lockdown has curtailed consumers demand for their products.
Thomas Schafer the Finance Minister of the German state of Hesse was found to be dead near the railroad tracks of Frankfurt. After an intensive examination of the passing of the minister the police discovered that it was a suicide as there was a note given up by the minister.
The letter says that the minister was deeply worried about Hesse’s ability to bounce back from the economic devastation which the virus will have on it.
His primary concern was whether he could figure out how to satisfy his job as the money serve appropriately with the goal that general society would not be baffled. His death is a deep concern for the people of the country as he was known for his passion, desire, work ethics and knowledge; he contributed a lot to the country’s economy.
His death has reduced the morale of the other ministers and the citizens of the country as his knowledge was a key for the reconstruction of the country’s economy in this dire situation.
Synopsis
The steps which Germany should, will and which have been taken to boost its economy are:
• The country must scrap the ideas of having a balanced budget as suspending it will allow the government to borrow a deficit amount of an extra 1.5 per cent of the GDP before it breaches the laws and rules of the European Union. This will limit the debt of the public to 60 per cent of the GDP. This is from an ING economist Carsten Brzeski.
• Before the virus struck Germany, it had set aside 150 billion Euros to improve on the infrastructure, education, housing and the digital technology which already exists within the country for the coming four years. This will make Germany which is has the largest economy in Europe boost its GDP by 0.4 per cent provided that the unemployment does not pick up in those four years.
• Germany has one of the poorest infrastructures which causes many problems to the country so, it could try to risk and invest higher in this sector for the coming 15 to 20 years. This has been stated y Christian Odendahl, who is a chief economist at the centre for European reform in Berlin. Germany is ranked really high in the overall global competitiveness index even though it has bad road quality and even worse internet connectivity. Such sort of investment programs is time consuming to implement but will have a bigger impact on the development of its economy.
• Christian Schulz who is an economist in the Citigroup says that Germany should follow United Kingdom’s example of 2008 by temporarily cutting its sales tax so that there is money left to give for the consumption a boost and this can help to prevent a deeper downturn. But Odendahl says that by cutting down the income tax it would be difficult for the local governments of Germany as it is their lifeblood for investment.
• One of the main reasons for the cause of Germany’s current troubles is because of its overdependence on the rest of the world to buy its manufactured goods. If Germany tries to reduce this dependency by buying those goods themselves, they can easily offset the recent decline in the foreign demand.
Conclusion
Just like that the entire world experienced a change in its daily routine and the way people live just because of this pandemic which has terrorized almost the entire world and the only respite which we get from this horrendous virus is the beneficial effects which it has on the environment and climate change.
Climate change is causing an increase in the relevancy and the spread of the which affects the poor substantially as they do not have enough financial aid to get themselves treated or to shift to another place which has a peaceful environment. COVID-19 is causing an economic downturn and affecting those which have no access to healthcare and is increasing the impact which it has on the climate crisis of the marginalized communities. This virus is making everyone more susceptible to the effects of climate crisis.