Many would not survive the second lockdown

Germany fears a second lockdown. The positive revision of the economic forecasts over the summer threatens to become obsolete. The actors seem to be trying at their respective levels to avoid such extensive shutdowns as in the spring.

But that is not certain if the number of infections continues to develop dynamically. Politics has got caught up in a one-dimensional security promise that cannot be fulfilled. The central orientation mark is the efficiency of the health system. This does not seem to be at risk at the moment, but what about an escalation?

However: must full utilization be avoided at all times? Why are protection efforts not consistently focused on vulnerable groups?

After all, the past few months have not been without a learning effect: schools and day-care centers are hardly a problem, hotels, retail and air travel are just as little problem; Risk clusters arise in the private sector – and in fact on occasions or population groups that can be clearly delimited.

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What would a second lockdown mean in economic terms, and what economic policy would it have to follow? As long as borders remain open and supply chains work, manufacturing will not be disrupted on the supply side. If the schools stay open, the employees are ready for action and the home office is practiced.

In the consumer-related areas the picture looks different. The stationary retail trade, hotels and restaurants, trade fairs and the entire cultural sector have been a long way from normal operations since the beginning of the pandemic.

The first lockdown was tough; the equity is often used up. The liquidity and bridging aids were only able to cushion this, but not to compensate. The structural change towards online platforms is also having an impact in retail.

Economic policy would no longer help

These consumption-related sectors would be primarily affected by massive restrictions on public life. Many business models would not survive. In such a situation, economic policy no longer helps, and an extension of the measures to support consumption would therefore be a mistake.