Investment perspectives in Germany after corona pandemic
The duly response of Germany to the greatest challenge since the II World War, so said Angela Merkel, as well as its highly equipped health care system confirm the leading role of the country at crisis management in general and furthermore classify it once again as one of the most stable and trustworthy investment environments.
Effective Measures in the health and financial sector
The most important and obvious evidences of the very good reflexes of the German government with regard to its effort to deviate the long term negative consequences of the current crisis are in the health sector: the support of the university research about combatting coronavirus which led to the development of an antibody test along with the establishment of a federal emergency mechanism which should be activated in case that the number of corona infections could unexpectedly rise and in the economic sector: the providing of enterprises with liquidity by simplifying and expanding their access to loan programmes (such as the ERP-Universal Start-up Loan and the KfW-Entrepreneur Loan), the introduction of the short-time-allowance concept as financial loss mitigation for a limited period for employers who continue to employ their workforce even under these extraordinary circumstances, the full compensation of the employers for the social security contributions which have to be paid solely by them for their short-time working employees, but also the support of self-employed people facing financial difficulties due to the corona crisis, while options for deferring tax payments and the abolishment of late payment fines should apparently be considered as significant facilitating economic measures.1
Already apparent positive results
The promptly taken restrictive measures, the broad testing policy and the strong hospital capacity have helped Germany to avoid the uncontrollable spread of the coronavirus and eliminate effectively and quickly its heaviest consequences. This fact has reinforced the trust and confidence of the local population in such an extent so that the people, after the lockdown measure has been lifted, have gradually restarted to return to their usual everyday activities by both visiting shops and malls and asking for service providing.2 Therefore a prediction that the general economic activity is going to reach shortly its normal levels could be regarded as reasonable and this has to be attributed to the government’s ability to react timely and properly to the profound effects of this health and economic crisis.
Forecast about relatively low financial losses
Although the cruel disruption of the economic progress having been reached at the beginning of this year is unavoidably going to affect the domestic and foreign investments even in one of the countries with the strongest economy in the whole world, according to the estimation of the European Commission Germany’s GDP (Gross Domestic Product) is expected to fall by 6,5% in 2020, while in other EU countries a fall by almost 10% is highly probable.3 Moreover, the economy of Germany is not based to a great extent upon tourism, which will heavily be declined because of the current crisis. What seems to be already certain is that the potential investors should give emphasis on the health sector and contemplate the possibility to focus on relocating the production of health care equipment, given that depending absolutely on China regarding the supplies of the relevant products has been questionable during the last months as China has been deeply affected by coronavirus. In addition, biotechnology, e-commerce and digital technologies are for sure to be found among the investment fields that could experience an impressive increase.4
Germany remains one of the most trustworthy investment locations in the world
This quick and effective response of Germany to the current exceptional conditions proves its uncontested preparedness for any crisis management and verifies its economic and political stability, which has always been a decisive criterion for investors, of course together with the solid and attractive especially for foreign investors -due to the simplified bureaucracy- relevant regulatory environment. So, its way of dealing with the current crisis definitely reassures the conviction that Germany is still one of the safest investment areas worldwide.
As a conclusion, the political, economic and legal profile of Germany could guarantee the successful realisation of an investment and there are without any doubt many sectors that could attract investments in the new era that emerged after coronavirus. Besides, every crisis contains chances, which can evolve to great achievements with important social meaning.
1 https://www.gtai.de/gtai-en/invest/business-location-germany/corona-crisis-and-germany–232102
2 https://www.dw.com/en/will-german-coronavirus-response-attract-foreign-investment/a-53356715
3 https://ec.europa.eu/info/business-economy-euro/economic-performance-and-forecasts/economic-performance-country/germany/economic-forecast-germany_en
4 https://www.iwkoeln.de/presse/videos-und-audios/beitrag/arndt-guenter-kirchhoff-wie-kommt-die-wirtschaft-staerker-aus-der-corona-krise.html