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, the country led by Chancellor Angela Merkel has found itself well equipped now to weather the global tragedy.
Already applauded for early actions such as social-distancing regulations and aggressive testing, which were 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.
Germany has registered some 150,000 infections.
“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 to be prepared for a crisis. So in announcing a $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.
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 percent of the salary of employees who are on reduced or no hours.
In the U.S., there has been growing impatience over virus-related shutdowns that have led tens of millions to lose their jobs, and the U.S. Senate on Tuesday approved nearly $500 billion in new aid for businesses, hospitals and testing, on top of a $2.2 trillion package passed last month in the country of some 328 million.
The U.S. has registered more than 825,000 infections and 45,000 deaths so far, including some 15,000 fatalities in New York City alone.
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.
The Associated Press contributed to this report.