Many look at Germany with envy

It is slowly becoming clear that the consequences of the corona crisis will occupy us for some time. Around the world, companies and consumers are losing confidence in the future economic development. Although the large fiscal packages were able to soften the initial shock, a certain realism seems to be slowly taking hold. Germany is still „the place to be“ in terms of the course of the Covid-19 wave, the mortality rate and the financial possibilities to cushion the economic crisis. This is a strong sign of Germany’s structural strength, but of course it also arouses desire among our European neighbours. European unity and a stable euro area are a great asset for all countries involved. This should not be put at risk in the coming negotiations. However, all countries should also think about the respective resilience and political enforceability of the envisaged measures. Otherwise, a compromise that has now been reached and that fulfils a large part of the wishes of the countries that have been hard hit may turn out to be a fissure in the European Community in the medium term.

The financial markets remain deeply impressed by the central bank measures. The bond markets have no problems absorbing the rising flood of bond issues, knowing full well that the central banks are ready to take over the debt instruments. The equity markets seem to be driven by the belief in the positive impact of the fiscal measures. Although the sharp fall in oil prices and the sharp drop in earnings estimates send clear warning signals. An adjustment to reality seems inevitable here.

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