After Thursday’s meeting of the Bank Board, CNB Governor Jiří Rusnok predicted in other words that when the fifth wave of the covid appears, it will no longer be with our economy. That is a bold statement. From the authority that is supposed to weigh the words on the pharmacy scales in the job description, especially the brave.
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Rusnoka quoted the media: “Any further tightening of anti-epidemic measures should no longer have tangible economic consequences. Vaccination and available new forms of medication will also help, as well as the fact that the economy has learned to work with coronavirus. “
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Let’s discuss the weaknesses of Rusnok’s optimism, which seems somewhat obligatory, with an electronic pencil.
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Above all, Jiří Rusnok is not an epidemiologist, and even they do not have a crystal ball to see into the covid future. We are wounding the second year of the pandemic, but experts worthy of the word still emphasize that we do not know everything we need about the virus, that it may surprise us that mutations in mutations can still flood us.
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So if we don’t know what will happen and how bad it might be, we can’t judge anything more about what “any further tightening of anti-epidemic measures” would look like. This can range from guidelines for wearing veils (minimal impact on the economy) to hard lockdown (huge impact on the economy). But Jiří Rusnok says that it will be fine, so he probably will.
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The governor seems to mean only the tightening of “domestic” measures. He probably doesn’t want to say that he won’t move the economy, even if the covid closures are announced by the countries we trade with. But even that can happen. By the way, new cases are currently growing faster in Germany than in our country.
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Then there is the factor of the unpredictability of the Czech government. In June 2020, when we crossed the first wave, Andrej Babiš reported: “It will never be a comprehensive measure again.”
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No, Jiří Rusnok, like any of us, cannot know what the covid will do or will not do yet and how the government, the business world and citizens’ wallets would react to it. Yes, we know more than a year ago and we are – it was also paid dearly – more experienced. But that “tangible economic impacts” could no longer occur? I wouldn’t bet on that.
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Of course, one could think about what economic impacts are “tangible” and what are only slight. In that case, it should be added that what seems easy at the macroeconomic level may hide very “tangible” specific debts and bankruptcies below, for example in the hospitality industry.
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Governor Rusnok supports his estimate by “helping vaccinations, available new forms of medication, and the fact that the economy has learned to work with coronavirus.” These are certainly a plus, but…
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Vaccination has slowed down and the term 70 percent vaccination coverage is currently at stake in November 2021. So at times in our latitudes considered more dangerous for the spread of the virus. There is a debate about the third dose, how long and how effectively antibodies remain in people after covid, and so on. We are in a much better situation than a year ago – but there is still an illusion that nothing serious can happen.
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The argument “the economy has learned to work with coronavirus” is simplified only through the measure, ie definitely through the governor’s.
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Yes, the pandemic and the fight against it are no longer “surprises”, some have adapted hard, some have gone bankrupt, some are prospering. Many entrepreneurs have “learned to work”, but by “going for blood”. And it is not at all clear whether only serious anti-epidemic restrictions would bring them to their knees or whether weak anti-epidemic restrictions would suffice.
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The price at which the economy has learned to work with coronavirus, and may include a positive momentum, is yet to be seen. And it does not only concern the economic results of companies, tax returns of entrepreneurs and squeezed public budgets, but also the “state” of employees, self-employed persons, managers. And customers.
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The main thing – even for the economy – is how people and society as a whole have learned to work with coronavirus. What has changed in our vitality, thinking, skills, habits, personal priorities.
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Uncertainty has been a problem since the beginning of the pandemic. We do not know what will happen, it is impossible to plan, unrest and worries stress us, all this is largely reflected in the economy. The situation has gradually improved, but the demand for a fixed point, for the promise that “nothing terrible will happen again”, continues.
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Jiří Rusnok offered such a reassuring vision. It is, of course, possible that it will also come true. But there is also a not insignificant probability that it is not. And if that doesn’t work, the unfulfilled prophecy will only lead to deeper disappointment. It will be remembered in the same way as we hold our heads over premature satisfaction after the first wave.
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