autoregion international 2/2020 - Greater Region Mobility Innovation

8 Overcoming the Corona Crisis with Confidence and Determination! By Dr. Carsten Meier, Managing Director of IHK Saarland Confidence and decisive action are the basis for successful entrepreneurship. But setbacks are also part of the business. It is crucial that we do not let this discourage us, but learn from it and draw the right conclusions – in business as in politics. This is the only way we are prepared for the next challenge. This applies all the more to the consequences of the corona pandemic, especially to the severe economic turmoil caused by this century crisis and the consequences of which we will have to face for years to come. Never before has the Greater Region experi- enced such a state of emergency in times of peace as this spring. Exit restrictions, social distancing, company, daycare and school clo- sures, closed borders and much more. Much of this was essential to successfully contain the pandemic. Some things were overblown and triggered – with our neighbors in France and Luxembourg as well as in business and society in the Saarland and in Rhineland-Palatinate – to put it mildly “head shaking”. Political crisis management worked well overall, but we are still a longway fromnormal, despite numerous easings. The week-long shutdown in spring led to an unprecedented slump in the economy in the Greater Region. Even in the financial crisis, the mood in the economy had not dropped as sharply as at the beginning of the second quarter. Many companies suffered from less demand, canceled orders, missing goods or supplier products, logistical bottlenecks and a lack of employees – with ongoing running costs. All of this has put a considerable strain on the financial situation of the companies. As a Chamber of Industry and Commerce, we therefore committed early on to ensuring that the entrepreneurial substance is secured by li- quidity-enhancing measures by the state and the federal government, such as immediate aid in the form of grants, tax deferrals, improved depreciation conditions and an expansion of the loss carry-back. And we promoted the establishment of a state-owned investment fund as well as a resilient strategy to exit the shutdown. Because companies need planning security. At the current edge, there are increasing signs that the economic situation in the Greater Region is stabilizing after the coro- na-induced supply and demand shock. The easing of the corona restrictions, the open- ing of borders and the stimulus package with which the Federal Government wants to stimulate domestic forces through con- sumption and investment incentives and at the same time provides strong impulses for an economic and industrial realignment, has given a first sigh of relief. But uncertainty about the further development is high. The propensity to invest and the consumer cli- mate have brightened somewhat in the meantime, but they are still far below the long-term average. A V-shaped course – deep collapse in spring, steep ascent in autumn – is therefore not to be expected. What we’re currently experiencing instead is a bottoming phase. How long this will last and when a sustainable upswing will grow depends on many facets. What does that mean for growth this year? Unlike other sub-regions of our Grande Région, Saarland has already entered the corona crisis with a heavy mortgage. One of the reasons is that vehicle construction and the steel in- dustry mean that two of the three key sec- tors are in the middle of an epochal structural change that is being driven by the interplay of decreasing market dynamics and increasing global competitive pressure on the one hand, and increasing political regulation (climate protection requirements) and new technolo- gies on the other. In addition, the Saar economy has remained below its potential for years. The level of economic performance in 2019 – 10 years after the global financial crisis – was still below the pre-crisis value of 2008. The main reason for this – in addition to the de- mography – is that ex-growth drivers due to protectionist trade policies and weakening demand in important target markets such as Italy or Spain no longer has a tailwind after products “made in Saarland”. As a re- sult of the corona pandemic, the economy has now suffered another severe blow. The EU Reconstruction Fund is therefore money well spent. A rapid surge in demand for capital goods and durable consumer goods produced in the Greater Region is no lon- ger expected this year. For Saarland, this is aggravated by the fact that neither private consumption nor public investment can take on the role of growth driver. In this respect, there are fears that the Saarland economy will collapse by around 15 percent over the whole year – the development of industrial sales (cumulative minus 25 percent in the first five months compared to the previous year), order intake (minus 26 percent) and exports (minus 24 percent) already provide a strong indication of this. Especially in the key sectors of the Saar economy – in the steel industry, in vehicle construction and in mechanical engineering - as well as in the foundries, the values are in the deep red range. The production capacities, in particu- lar in the automotive sector with its 200,000 Image: © IHK Saarland S H A R E Dr. Meier is the managing director of the Saarland Chamber of Industry and Commerce and heads the area of economic policy and business promotion, inwhich the IHK Competence Center for Foreign Trade is also integrated. Dr. Meier looks after the key sectors of the Saar economy and is responsible for the region of the Saarlouis district.