Merkel orders Germany into hard lockdown as infections swell

Berlin

GERMANY will enter a hard lockdown from Wednesday, with non-essential stores shuttered, employers urged to close workplaces and school children encouraged to remain at home.

The tighter restrictions - including a ban on gatherings over the New Year - will last until at least Jan 10 after a looser shutdown failed to halt a surge in daily coronavirus infections and deaths. Chancellor Angela Merkel agreed the measures with the heads of Germany's 16 states in talks on Sunday and warned of rising pressure on the nation's health system.

"There is an urgent need for action," Mrs Merkel told a news conference. "We have seen rising infections and exponential growth in recent days and that means that we have to grieve many dead."

After comfortably handling the initial wave of the pandemic, the country is lagging behind many of its neighbours, and officials came under increasing pressure to act days before Christmas. Infections and fatalities rose by record amounts on Friday, and almost 22,000 have died from the disease, out of a total of 1.3 million cases.

"The coronavirus is out of control, so we don't want to do things piecemeal but act decisively," Bavaria Premier Markus Soeder said alongside Mrs Merkel, describing the pandemic as a "catastrophe" and calling for a national effort to tackle it. "If we're not careful, Germany will quickly become the problem child of Europe," he warned.

Germany's stumbles in dealing with the disease are linked to its complex and at times dysfunctional federal system, Mrs Merkel's pursuit of open borders and political power plays ahead of next year's national election. It puts Europe's largest economy at risk of another blow to consumer and business confidence after the spring lockdown triggered a collapse in activity.

A group of retailers wrote to Mrs Merkel warning of "disastrous consequences" if stores are closed during the key shopping month of December, Bild newspaper reported on Sunday. "You are also irrevocably sealing the insolvency of thousands of retailers and putting millions into unemployment," Bild quoted the letter as saying.

Germany's soft shutdown from early November - which closed bars, gyms and theatres but allowed most of the economy to continue operating - failed to bring the virus back under control, putting hospitals under strain and complicating contact tracing.

Officials have said the seven-day incidence needs to come down to 50 per 100,000 and stay there. The measure was at a record 169 on Sunday, according to the RKI public health institute, while the number of coronavirus patients in intensive care rose to 4,527, also the highest since the start of the outbreak.

The government provided emergency relief for businesses in November and December worth around 15 billion euros (S$24.2 billion) a month. However, officials have warned that such assistance cannot continue into 2021, with Germany already taking on tens of billions of euros of new debt this year and next.

A less generous programme that compensates for fixed costs such as heating and rent has been extended until the end of June and expanded. Finance Minister Olaf Scholz estimated on Sunday that it will cost the federal government around 11 billion euros per month during a hard lockdown.

Instead of brightening the mood before the holidays by loosening curbs, Germans face the psychological blow of tighter restrictions as 2020 draws to a close and before a vaccine is rolled out, likely starting early next year.

Economy Minister Peter Altmaier said Sunday's decisions are "tough but necessary".

"The faster we bring the infection numbers down, the quicker things will be looking up again for our economy," he said in an emailed statement. BLOOMBERG