The case of Germany

Abstract

The COVID-19 pandemic led to a severe GDP contraction of 11.9 percent in the second quarter of 2020 in Germany, dwarfing the corresponding figure of 7.9 percent during the financial crisis in 2009. To cushion the effects, the government reacted with an unprecedented set of measures with the combined volume of about 1,500 billion EUR. Mass bankruptcies and large-scale unemployment have been avoided by the rescue measures in 2020, but a lot of the spending lacked clear focus and may hinder necessary structural change in the future. Given the comparatively healthy state of public finances in Germany in recent years, even the packages of the current magnitude do not appear unsustainable as yet, but given further unforeseeable future obligations also in the European context, that may change in the future. © 2022 selection and editorial matter, Bernadette Andreosso-O’Callaghan, Woosik Moon and Wook Sohn;individual chapters, the contributors.