German business decries gradual easing of coronavirus curbs as "disaster"

BERLIN (Reuters) - German business groups expressed dismay on Thursday after Chancellor Angela Merkel and state leaders agreed a gradual easing of coronavirus curbs but added an “emergency brake” to reimpose restrictions if case numbers get out of control.

The tentative reopening plan dashed any hopes of a swift rebound in consumer spending this month to end a weak first quarter on a stronger note. Some economists also worried about long-term damage to the economy and people’s opportunities in life.

“The results of the coronavirus summit are a disaster for the retail sector,” said Stefan Genth, chief executive of the HDE retail association.

Under a five-stage plan, up to five people from two households will be allowed to meet from March 8, with children under 14 exempt. Some shops, including book stores and garden centres, can reopen.

Other retailers can only reopen in regions where case numbers are below 50 cases per 100,000 people over seven days. If the incidence rises above 50, ‘click and meet’ restrictions kick in, whereby customers book a slot to go to the store.

On Thursday, Germany’s seven-day case average rose to 64.7 from 64 on Wednesday. New infections increased by 11,912 to 2,471,942 and the death toll rose by 359 to 71,240.

“The stable incidence of 50 prescribed for opening shops is not in sight,” the HDE said, adding that retailers were likely to lose another 10 billion euros ($12.1 billion) in sales by the end of March compared to 2019.

Commerzbank economist Joerg Kraemer and Holger Schmieding at Berenberg Bank both expect gross domestic product (GDP) to fall by 1.8% on the quarter in the January to March period.

Clemens Fuest, president of the Ifo economic institute, worried about school closures. These could have “massive, measurable effects on lifetime incomes”, he said, calling for catch-up classes over the summer holidays.

The powerful BDI industry association urged the government to speed up efforts to expand vaccinations and rapid testing.

The HDE was sceptical about the possibility of shopping by appointment, noting that personnel and operating costs would probably be higher than the turnover.

Hans Peter Wollseifer, president of the association representing skilled trades, also called for faster progress on vaccination and mass testing for COVID-19.

“In order to prevent the death of businesses on a broad front, economic life must be made possible again as quickly as possible,” Wollseifer said. “The decisions taken now do not do justice to this.”

He called for other criteria to be taken more into account instead of just focusing on the level of infections, such as the situation in intensive care units in hospitals as well as progress in testing and vaccination.

($1 = 0.8295 euros)

Reporting by Christian Kraemer, Michael Nienaber and Rene Wagner; Writing by Emma Thomasson, Michael Nienaber and Paul Carrel; Editing by Toby Chopra, Kirsten Donovan