Economists warn of lockdown with 52 billion euros in damage

Berlin 3G, 2G or complete lockdown: In view of the rising number of infections, many people are worried about new restrictions, which could have a significant impact on the economy. The seven-day incidence of hospitalization – the new decisive factor for assessing the situation – is rising steadily. The vaccination campaign comes to a halt. The start of autumn hardly promises any improvement.

That brings back memories of 2020. It was only in November that politicians reacted to the increasing number of infections, but with all the more severe restrictions. Lothar Wieler, head of the Robert Koch Institute (RKI), is now warning of a “brilliant course” of the fourth wave – albeit under changed conditions due to the vaccinations.

But new questions arise: Should the tested, vaccinated and recovered (3G) be treated equally, the unvaccinated be disadvantaged (2G), or do we need a complete lockdown (0G) again? The decisive factor here is: In which case, in addition to protecting health, will not drive the economy into the next crisis?

Answers to these questions are provided by calculations by the Leibnitz Institute for Economic Research (RWI) for the Handelsblatt. These show that companies would be seriously hit in any case.

Top jobs of the day

Find the best jobs now and
be notified by email.

Renewed restrictions would cost between 6.5 and 52 billion euros in added value, depending on the design – a large part of which could be averted through exceptions for vaccinated and tested people.

RWI President Christoph Schmidt does not expect a complete lockdown and therefore less dramatic consequences than last winter. “The consequences for the individual economic sectors affected will, however, be comparatively strong,” he expects. Ifo President Clemens Fuest says: “Companies are worried about a new lockdown. She is burdened by the insecurity. “

Providers of contact-intensive services are seen as acutely threatened by restrictions. This includes restaurants, tourism, art and culture. Politicians are still divided on the extent to which vaccinated and non-vaccinated people should be treated differently.

The RWI has therefore calculated how great the damage would be for the various (partial) closings if they were introduced in the fourth quarter and still apply for the entire first quarter of 2022.

1. Complete lockdown

The RKI puts the number of corona infected people at 31,000 despite the vaccination. Nevertheless, it currently seems unlikely that politicians will prohibit vaccinated people from accessing restaurants or cultural sites.

Should the so-called vaccination breakthroughs take over, for example through a new mutant, and business closings of the contact-intensive services for all citizens would be necessary, this would put a heavy strain on the economy.

The damage would amount to 52 billion euros. The gross domestic product (GDP) would be 0.6 percentage points lower in the full year 2022. The comparative value is a scenario without closures, in which companies benefit from above-average demand because citizens catch up on concerts or trips.

2. Lockdown for the unvaccinated (2G)

38 percent of those over the age of twelve in Germany are not vaccinated. The RWI assumes that the rate of vaccinations will remain roughly the same, so that a quarter would still be unvaccinated in winter. However, the researchers also consider more unvaccinated people to be conceivable.

If politicians were to deny access to restaurants only to the unvaccinated – i.e. introduce a 2G regulation – the added value would be 13 billion euros less. That would cost GDP 0.15 percentage points.

Two assumptions were made for the calculation because modeling is hardly possible: Vaccinated and unvaccinated persons have the same financial possibilities and wishes to consume. And it is left out of the fact that the unvaccinated, instead of traveling or dining, could order more online or buy groceries.

Lockdown in the city center

Renewed restrictions would cost between 6.5 and 52 billion euros in added value, depending on the design.

(Photo: dpa)

Under these conditions, excluding the unvaccinated would be four times less detrimental to the economy than a complete lockdown. Economist Fuest also points out an effect on a situation without restrictions that the model does not include: “If the unvaccinated are not excluded, some vaccinated people may stay away out of concern because a residual risk remains for those who have been vaccinated.”

3.Lockdown not for vaccinated and tested people (3G)

At the moment there is a regulation in most places that unvaccinated people can equate themselves with vaccinated people by means of a negative rapid test. This offer has been well received, mainly because citizens can take the tests for free.

Health Minister Jens Spahn (CDU) will end this option from mid-October. The federal government will then no longer bear the costs for the test providers, for which it has previously reimbursed eight euros. “If unvaccinated people can test themselves freely, the economic effect depends primarily on the prices for the tests,” says RWI economic director Torsten Schmidt.

Since there are quite a few test centers that are in competition with one another, it can be assumed that there will be no major price differences between the providers. “The height is likely to prevent only some of the unvaccinated from testing,” explains Schmidt. Assuming that half of the unvaccinated test themselves freely in order to make use of further contact-intensive services, the loss of added value would be 6.5 billion euros and the GDP minus 0.075 percentage points.

Given the warnings from scientists, worries about renewed restrictions are anything but unfounded. The Charité virologist Christian Drosten speaks of “considerable pressure on the clinics”. “There are good reasons for worries about a strong fourth wave,” says Timo Ulrichs, epidemiologist at the Chair for Global Health at the Akkon University in Berlin.

After all, the number of intensive care patients with Covid-19 has doubled in the past two weeks alone. Of course, the German hospitals are better positioned today than they were a year and a half ago, “but we still cannot afford to have masses of Covid patients.”

The Federal Association of Doctors of the Public Health Service (BVÖGD) has pointed out that the health authorities in Germany can no longer track all of the contact persons of infected people.

The unvaccinated are particularly worrisome. The vaccination campaign comes to a halt. “Unfortunately, we are currently only making slow progress,” wrote Health Minister Spahn on Twitter. There are still “too many unvaccinated to overcome the pandemic”.

Spahn, like many of his cabinet colleagues and most of the prime ministers, had already clearly positioned himself: There would be no new lockdown, especially not for those who had been vaccinated. So far, however, this is nothing more than lip service.

Above all, politicians do not dare to support the option of excluding the unvaccinated before the general election. Union faction leader Ralph Brinkhaus brought this into play a few weeks ago, but was promptly slowed down by his party leader Armin Laschet (CDU).

“A clear policy statement for 2G, for example, could now reduce uncertainty, albeit at the expense of the non-vaccinated,” says Ifo President Fuest. According to the industrial policy spokesman for the Greens, Dieter Janecek, the federal government and prime minister must now clearly admit that vaccinated people do not have to fear closings “so that companies in the service sector and culture can plan”. Otherwise there is a risk of the next economic slump in winter.

More: Laschet and Brinkhaus argue about dealing with non-vaccinated people