Retrospect on Germany: Tuesday, 05 May 2020

by Thorsten Koch

Good start to school, despite some deficits

The German Teachers’ Association is obviously satisfied with the first day of school on May 4th, which followed a break of several weeks caused by the Corona pandemic. After the final classes, it was now time for the last elementary school classes and the students who were to write final exams in the coming school year to go back to school, the association said. It advocated proper annual grade certificates. The missing subject matter usually taught, however, can no longer be made up for completely before the summer holidays. Teaching and exams would “extend well into the next school year”.

Federal Constitutional Court ruled against government bond purchases on a large scale

According to the Federal Constitutional Court, the European Central Bank’s government bond purchases are partially unconstitutional. Clemens Fuest, President of the Ifo Institute in Munich, commented that this would limit the ECB’s scope for action. For example, the Central Bank will now have to explain why it considers massive government bond purchases to be proportionate. The deadline expires in three months.
Economic expert Christian Odendahl from the Center for European Reform does not expect any major changes in the near future after the judgment. Lucas Guttenberg from the Jacques Delors Center in Berlin said that the ruling would lead to uncertainty as to what powers the ECB had. Up until now, the central bank has been able to generate demand for the euro-zone by buying government bonds, thereby keeping interest rates low, which countries have to pay for their debts. Guttenberg fears that interest rates on Italian government bonds, for instance, would now rise.

A premium for cars with diesel or petrol engines?

Chancellor Angela Merkel discussed with the automotive industry representatives about purchase premiums. Environmentalists criticized that a premium for diesel and gasoline cars was the wrong signal. No decision has yet been taken on aid to the industry during the Corona crisis. The parties agreed to continue talking about “measures to stimulate the economy” in a working group. The measures had the purpose of representing a “contribution to modernization and towards innovative vehicle technologies”, federal government spokesman Steffen Seibert said. Decisions may be made in June.

No subsidies when distributing profits to investors

Federal Finance Minister Olaf Scholz (SPD) recently emphasized that borrowers should not distribute profits or dividends to the economy. Federal Minister of Economics Peter Altmaier (CDU) made a similar statement. Tax money would not be given away lightly. Some corporations, such as the sporting goods manufacturer Adidas or Lufthansa, have announced that they will adhere to the policy requirements for funding.

Alternative media contradictory

Since the beginning of the Covid 19 pandemic, so-called alternative media have changed their tone against politics, science and reputable media. Until April, they wrote that Chancellor Angela Merkel was not sufficiently protecting Germany. Lately, the alternative media have been issuing the odd claim that Germany is “totalitarian”.

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