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![The corona lockdowns are shrinking the global economy, costing trillions of dollars ...]()
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The corona lockdowns are shrinking the global economy, costing trillions of dollars …
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Anadolu Agency via Getty Images
![... global business management. Like here in lockdown in Lisbon or ...]()
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… global business management. Like here in lockdown in Lisbon or …
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![... in Bern. Because the economy is at a standstill in many places ...]()
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… in Bern. Because the economy is at a standstill in many places …
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Franziska Fischer (28), economist at Credit Suisse: “Without short-time work, unemployment in Europe would have skyrocketed as it did in the USA.”
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Sophie Stieger / 13 Photo
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The economist Monika Bütler (59) advocates state aid packages: “It cannot be that we let companies down that get into trouble through no fault of their own.”
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Corona has destroyed trillions. Trillions of dollars, francs or euros – the currency does not matter, the economic damage caused by the pandemic is enormous. BLICK does the math.
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Instead of growing, as all forecasts had predicted at the end of 2019, the global economy shrank in 2020. The decline is likely to be around six percent, as the economic researchers at ETH Zurich estimate. That is a much more severe slump than in 2009 as a result of the financial crisis.
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Corona costs five trillion dollars
“The slump back then affected industry, trade and banks – consumption and services were little or no affected,” explains Jan-Egbert Sturm (51), Director of the Economic Research Center at ETH Zurich (KOF). “In contrast, the lockdowns in many countries have temporarily shut down large parts of the economy.”
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Specifically: Corona cost the global economy around five trillion dollars in 2020 alone. A huge amount roughly equivalent to the annual economic output of Japan – the third largest economy in the world! Or that is more than six times as large as Switzerland’s annual economic output.
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In addition, around CHF 30 billion in value added loss in the Swiss economy looks modest, but it hits our small, open economy just as hard.
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If the economy collapses, the labor market is hit above all. The corona crisis could cost well over 20 million jobs worldwide. In Switzerland, the so-called unemployment rate has risen sharply: 246,000 people are unemployed, 54,000 more than before the Corona crisis. Short-time working in Switzerland and Europe still prevents worse. “Without short-time work, unemployment in Europe would have skyrocketed as it did in the USA. The unemployment rate there has now reached almost 15 percent – with corresponding negative consequences for those affected, “says Franziska Fischer (28), an economist at Credit Suisse, praising the Europeans.
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Aid packages worth billions
In such a gigantic crisis, only the state can help. Aid packages worth billions of euros are being put together around the world. A huge flow of money is supposed to save the world economy from the worst. The International Monetary Fund estimates the fiscal programs announced so far at a total of 14 trillion dollars. However, states promise a lot and quickly, by no means each of the 14 trillion will actually be paid out and reach those affected.
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Nevertheless, the fact that the aid packages are around three times the size of the trillions destroyed is one reason why the stock market is booming. It anticipates that large parts of the promised money will eventually come back into the real economy and ensure recovery and growth.
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The state aid packages are only part of the bill, says economist Monika Bütler (59), who sat in the federal scientific task force in the first Corona year: “It is not just the state’s expenditure that matters. The private sector and individuals also bear the costs of the pandemic. Companies get into financial distress and many people lose their jobs and have to reorient themselves. ” And she adds: “It cannot be that we let companies down that get into trouble through no fault of their own.” Sturm, who is still part of the task force and advises the federal government, agrees.
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Switzerland can afford new debts
There is no getting around aid packages for the economy. However, a state must also be able to afford it. “There are emerging and developing countries in which the state has put together much smaller or even no aid packages due to the limited financial leeway,” adds Fischer.
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Switzerland is one of the countries that can put together a large aid package. The federal government has paid more than CHF 31 billion to date, plus guarantees and guarantees of over CHF 41 billion. In addition, the compassionate use program is to be increased. “The state shouldn’t spend money unnecessarily,” says Sturm. “But Switzerland can afford to support those parts of society that need the money to bridge the crisis.” Because: “We are able to reduce debt, as we have proven in the last 15 years,” adds Sturm.
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Right. The ratio of national debt to annual economic output was 45 percent in 2004. By 2019, the federal government had cut this to 26 percent. This should also be possible again in the times after Corona.
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Especially since the economy will recover again, even if the times before Corona will not return in many places. “Corona will change the economy in many areas,” believes Bütler (59). “Supply chains are being reorganized, some of the production is likely to be relocated to Europe, and there will be the urgently needed digitalisation boost. In the future, people will travel differently and eat differently. ”
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Published: 02/22/2021, 01:02 a.m.–
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