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Germany is bracing for many months of economic crisis, as it battles through the coronavirus pandemic.
As Europe’s largest economy prepares to launch a multi-billion-euro rescue package today, government ministers in Berlin are concerned that the crisis will make key companies and industries vulnerable to hostile foreign takeovers.
In a weekend interview with the Süddeutsche Zeitung (link in German) newspaper, the federal transport minister said that weakened German companies could be targeted by international investors — and that the government needs to get laws in place to avert that.
"There is worldwide interest in successful German companies, also in mobility and infrastructure," transport minister Andreas Scheuer told the paper. He said he was in discussions with other ministries to draw up countermeasures, noting “it is about securing economic power in Germany after the crisis."
China in particular has shown great interest in cutting-edge German companies, especially in the tech and engineering sectors. Chinese firm Midea’s €4.5 billion takeover of robotics firm Kuka in 2016 provoked major angst in government circles, as did Geely becoming Daimler’s biggest shareholder in 2018.
Olaf Scholz, Germany’s finance minister and vice-chancellor, told Süddeutsche Zeitung that the government is ready to deploy the “great financial strength of our state” to protect companies at this time. It is also possible that the government would take temporary ownership in companies to help ward off foreign investors.
Bavarian state premier Markus Söder wants to ban foreign takeovers of German firms if needs be. "If at the end of this crisis... almost the entire Bavarian and German economy is in foreign hands and we no longer have any control options, then it is not just a medical crisis," Söder said.
The IfO Institute said today that the COVID-19 crisis could cost the German economy more than half a trillion euros and more than a million jobs.
"The costs are expected to exceed anything known in Germany from economic crises or natural disasters in recent decades," said Ifo President Clemens Fuest in a statement. The Ifo puts the costs of a two-month partial shutdown of the economy at between €255 bn and €495 bn.
Merkel in quarantine
Angela Merkel’s office announced on Sunday evening (22 March) that the chancellor would go into a two-week home quarantine, after a doctor with whom she had an appointment later tested positive for the coronavirus.
The announcement came just after Merkel announced a raft of new measures aimed at slowing the spread of the virus in Germany. All 16 states will now implement a ban on more than two people gathering together at any time, and people should only leave the house for essential chores, and then alone or in groups of two maximum.
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