Why Germany has a low death rate, few economic woes during pandemic
BERLIN - Derided by many economists for years for insisting on a balanced budget and criticized for a health care system seen as bloated and overly expensive, Germany has found itself well equipped now to weather the coronavirus pandemic.
Already applauded for early actions such as social-distancing regulations and aggressive testing seen as helping keep the death toll comparatively low, Europe's largest economy has had the financial flexibility to launch a massive rescue plan to help businesses and keep workers paid.
As the country moves to relax some restrictions this week, Chancellor Angela Merkel is pointing to the example of South Korea, which relied on its experience fighting a different coronavirus five years ago to combat COVID-19, as the way forward.
Meantime in the U.S., some protesters have taken to the streets - supported by President Donald Trump's tweets - to demand an end to virus-related shutdowns to help the faltering economy, which has caused tens of millions to lose their jobs, even if it could lead to an increase in deaths as the health care system struggles.
“This is a crisis which, on the one hand, has probably hit the U.S. where it is most vulnerable, namely health care,” said Carsten Brzeski, ING bank's chief Eurozone economist. “While at the same time it has hit the German economy where it's the strongest.”
Brzeski was among those who argued for Germany to spend more to stimulate the economy as growth ground toward stagnation, but concedes now the country is in a fortunate position.
For years, balanced budget proponents argued it was prudent during good economic times to bring Germany's house in order to be prepared for a crisis. So in announcing a 1 trillion euro ($1.1 trillion) rescue plan for the country's 83 million people last month, Finance Minister Olaf Scholz was able to assure there was more money available, if needed.
And while Italy and Spain were faced at the height of the crisis with having to decide whether to allocate precious ICU beds to elderly patients with the most urgent need or to younger patients with the greatest chance of survival, Germany has never had a shortage and has even taken in patients from other European countries.
“They had the means, but then they also had the political will, and also the very good analytical insights to use the means,” Brzeski, said, noting Merkel was a scientist before entering politics.
“I can't imagine any government better than Angela Merkel's to deal with this.”
Germany is now taking baby steps to ease restrictions, allowing smaller shops to reopen this week while sticking to strict social-distancing guidelines and requiring face masks on public transport and in stores. The effect will be analyzed after two weeks to see whether infections have again started to significantly climb.
“We must not overwhelm our health care system,” Merkel said, warning restrictions could be snapped back. “The best path is one that is careful, and not taken light-heartedly.”
The far-right Alternative for Germany party has criticized Merkel's go-slow approach as “ruining our country,” but the chancellor's popularity has been steadily rising and Germans overwhelmingly see her government's crisis management positively.
Opening her Berlin toy store Wednesday for the first time in over a month, Galina Hooge said she had already received government aid and the process was “surprisingly quick and uncomplicated.”
She said it only covered the store's rent and bills, but she felt relatively secure thanks to Germany's universal health insurance and strong social safety net.
“The main thing is that everyone stays healthy and the situation doesn't become like America,” she said, referring to the large number of cases and deaths in the United States.
Besides help for small businesses, Germany's aid package is designed to keep the unemployment rate down and allow workers to return quickly when possible. While Washington is sending out one-time stimulus checks to Americans, the German government plan pays at least 60% of the salary of employees who are on reduced or no hours.
As restrictions are eased, Merkel has pointed to South Korea as an example of how Germany will have to improve measures to “get ahead” of the pandemic with more testing and tracking of cases to slow the infection rate.
Experts say one reason South Korea has managed to avoid lockdowns or business bans was because of its aggressive testing and contact-tracing program that draws from its experience of fighting a different coronavirus - MERS or Middle East Respiratory Syndrome -- in 2015.
Following that outbreak, which killed 36 people and sickened around 200, South Korea rewrote its infectious disease law to allow health authorities quick access to a broad range of personal information to fight infectious diseases.