Job fears mount in Germany as virus closes shops again

Agence France-Presse

This is AI generated summarization, which may have errors. For context, always refer to the full article.

Job fears mount in Germany as virus closes shops again

LAST-MINUTE RUSH. People crowd the main shopping street Zeil in the city center of Frankfurt am Main, Germany, on December 15, 2020.

Photo by Yann Schreiber/AFP

The German Retail Association warns that 'up to 50,000 shops with 250,000 employees might no longer have a future'

New restrictions in Germany that will shutter most shops to curb the second coronavirus wave have raised fears of thousands of job losses, industry representatives said on Tuesday, December 15.

Without additional government support, “up to 50,000 shops with 250,000 employees might no longer have a future,” the German Retail Association (HDE) said in a statement.

The industry can “no longer survive without tailor-made financial assistance,” the HDE added.

To curb a sharp rise in COVID-19 infections, Germany will close non-essential shops from Wednesday, December 16, until at least January 10, in addition to measures already in place since November that have closed bars, restaurants, leisure centers, and cultural sites.

To help the affected businesses, the German government is committing 11.2 billion euros ($13.6 billion) a month in aid. 

That includes raising the ceiling for direct aid to compensate for fixed costs to shuttered firms from 200,000 euros to 500,000 euros.

With the latest restrictions falling in the middle of the year’s busiest shopping season, Berliners rushed to queue up outside stores for Christmas gifts on Tuesday, Agence France-Presse reporters saw. 

“The usually strong sales period towards the end of the year will be a fiasco for many traders,” HDE boss Stefan Genth said.

“In the fashion trade in particular, many companies are on the verge of bankruptcy,” Genth added.

Even with the promised government support, the number of unemployed could rise by between 50,000 and 100,000 as a result of the renewed shutdowns, according to the influential IFW economic institute. 

The IFW expects Germany’s economy to shrink by 0.8% in the 4th quarter of 2020 and by 1.4% in the first 3 months of 2021, plunging Europe’s economic powerhouse into a double-dip recession, despite a strong recovery over the summer. 

The government however still anticipates that the economy will expand slightly between October and December by 0.4%.

“I’m relatively sure we will not have a recession like in the spring,” Economy Minister Peter Altmaier said on Monday, December 14. 

Berlin expects German output to contract by 5.5% in 2020, before seeing a rebound of 4.4% in 2021 and 2.5% in 2022. – Rappler.com

Add a comment

Sort by

There are no comments yet. Add your comment to start the conversation.

Summarize this article with AI
Download the Rappler App!