FX.co ★ Germany to face unemployment and wave of bankruptcies due to pandemic

According to RT with reference to the Welt-TV channel, Germany's economy may suffer devastating consequences because of the government’s decision to extend the lockdown in the country. Experts underline that Germany may be swept away by a huge wave of bankruptcies. As a result, the level of unemployment will spike.

Not long ago Germany entered its second major lockdown against the background of a surge in the new coronavirus cases. Experts at the German Institute for Economic Research made an even gloomier prediction. The year 2021 may be a time of "economic disappointments". The biggest issues will be massive bankruptcies and unemployment.

Marcel Fratzscher, the President of the German Institute for Economic Research, is sure that if a wave of bankruptcies sweeps through the country, short-term benefits will not help employees. People will be unable to find a job. This is why unemployment is inevitable. According to the analyst's forecast, this year companies will cut their staff in an attempt to avoid insolvency.

Armin Lachette, the Prime Minister of North Rhine-Westphalia, points out that the government is doing its best trying to protect the health of citizens, However, by supporting the healthcare system, the authorities are unlikely to cover all sectors affected by the pandemic. Therefore, it will lead to a crisis in some economic sectors. He sums up that the national economy is irreparably damaged due to uneven economic support. On top of that, German Chancellor Angela Merkel plans to extend the lockdown. Economists are voicing concerns that this may deliver a severe blow to the German economy.

In mid-December 2020, Merkel announced the introduction of a nationwide lockdown, which lasted until January 10, 2021. Currently, all retail outlets in Germany are closed, except for grocery stores and pharmacies.

From January 18 to 22, Angela Merkel and the Prime Ministers of the Federal States will discuss the possibility of extending quarantine restrictions as the virus is still spreading.