Merkel proposes gradual opening of shops, hotels from next month

BERLIN (BLOOMBERG) – German Chancellor Angela Merkel wants a gradual reopening of shuttered stores and hotels next month, as long as the coronavirus infection rate continues to fall and reaches manageable levels.

Dr Merkel will propose the move to Germany’s 16 state premiers later on Wednesday (Feb 10) while arguing for the current restrictions – including the closing of schools and non-essential stores – to remain in place into next month, according to a chancellery briefing document seen by Bloomberg.

According to Dr Merkel’s plan, stores could reopen in regions with a stable seven-day incidence rate of 35 or less per 100,000 people and hotels in areas where the rate is less than 20.

For Germany as a whole, the rate has been declining steadily since a peak of close to 200 before Christmas.

It fell to 68 on Wednesday, according to the latest estimate from the RKI public-health institute.

With citizens increasingly fed up with curbs on daily life, Mr Bodo Ramelow, premier of the eastern state of Thuringia, signalled his support for mapping out a cautious plan that includes reopening schools and daycare centres.

“People need to see that there is a prospect” of restrictions being lifted, Mr Ramelow, whose region has the highest incidence rate in Germany at more than 120, said on Wednesday in an interview with ZDF television.

The chancellery briefing document says that due to the growing spread of Covid-19 variants, “contact restrictions must remain in place in the next few weeks”.

A version of the proposals published by Handelsblatt newspaper includes extending curbs until March 14, though that could still change.

Schools will have priority once the lockdown is lifted, the document says.

However, a number of state leaders want to reopen them sooner, setting the stage for a long and heated debate with Dr Merkel during Wednesday’s video call.

If the plan is agreed, they would hold their next round of talks on March 10.

Meanwhile, the scale of the impact of the pandemic on Europe’s biggest economy is becoming clearer.

The Ifo institute estimated on Wednesday that the restrictions depressed output by half a percentage point in the fourth quarter and will slice about one point off in the first three months of this year.

However, the effect is considerably weaker than the lockdown last spring, as it principally affects businesses like hotels, restaurants, hairdressers and cosmetic studios, Dr Timo Wollmershaeuser, head of Ifo’s forecasting unit, said in an e-mailed statement.

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First quarter stagnation

“Since the manufacturing and construction sectors continue to do well, GDP is unlikely to decline at the beginning of the year, but rather stagnate,” Dr Wollmershaeuser said.

While the infection rate has come down consistently since the beginning of the full lockdown in late December, Dr Merkel continues to be worried about the spread of mutant virus strains.

The German leader has warned that around a fifth of Germany’s virus cases could be a more contagious UK variant, considerably more than the 6 per cent indicated in studies up to now.

Dr Merkel’s government has come under fire for the relatively slow pace of its vaccine roll-out, after deciding to source the shots jointly through the European Union.

Germany has so far administered about four doses per 100 people, according to the Bloomberg Vaccine Tracker.

That compares with 13.5 in the US and nearly 20 in Britain, although both nations started their vaccination campaigns several weeks earlier.

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