Ifo Institute: Corona aid has achieved its goal

Title: Ifo Institute: Coronavirus Aid Assessment

With the economic research institute, Ifo, stating that most coronavirus aid has achieved its goal, it's time to dissect the assertions made by Joachim Ragnitz, the deputy head of the Ifo branch in Dresden. Ragnitz praised the corporate liquidity aid and extended short-time work rules for their timely and targeted nature, designed to help businesses under lockdown. However, he criticized the reduction in VAT rate and loans to struggling companies as not being specifically aimed at businesses affected by the pandemic (NTV.de).

Digging Deeper

While the Ifo Institute's analysis highlights the success of certain aid measures, it's essential to acknowledge the broader implications and criticisms of the government's handling of the pandemic.

1. Vaccine Mandate: The rejection of the vaccination mandate for the elderly led to criticism for possibly escalating the risk of severe cases and deaths among older adults.
2. Legal Challenges: Coronavirus measures, including the Bundesnotbremse (emergency brake) measures, faced numerous legal challenges, highlighting ongoing political and legal debates.
3. Economic Stimulus Packages: Despite the praise for the size and scope of the stimulus packages, concerns about complexity and constantly-changing eligibility rules created burdens for tax advisors and auditors.
4. Protective Equipment Shortages: The lack of protective equipment, notably face masks and disinfectants, was a significant issue because the government's handling of procurement was criticized for inefficiencies and potential corruption.
5. Parliamentary Role: Observers accused the government of circumventing parliament in decision-making processes during the pandemic, which was perceived as an obvious discrepancy between political reality and constitutional law.
6. Vaccination Certificate Ordinance: Criticism rained down when the ordinance relinquishing the validity of vaccination certificates to health organizations was implemented in January 2022.

As we navigate towards post-pandemic life, the Ifo Institute's assessment of the German government's coronavirus aid measures serves as a roadmap for understanding what worked, what didn't, and what lessons must be learned for the future.

Additional Insights

According to a study, the overall economic impact of the coronavirus pandemic has resulted in losses estimated to be around 330 billion euros for the years 2020 and 2021 and an additional potential loss of 50 billion euros in the first three months of 2022 (source: Ifo Institute). Much of this financial burden will be shouldered by future generations, as the repayment of coronavirus loans runs up until 2058.

Sources

1. Ifo Institute's assessment -
2. Impact of the pandemic -