Interview with economics Professor Dr. Monika Schnitzer

In the middle of the corona crisis, Achim von Michel discussed in a web seminar with Prof. Dr. Monika Schnitzer from the Ludwig Maximilians University in Munich. The focus was on questions about the economy in Germany and Europe, the planned aid packages, European trade and medium-sized companies in the period after the Corona crisis.

As a member of the Council of Government Experts for assessing macroeconomic developments since 2020, Schnitzer has been one of the so-called “economic methods” that regularly submit forecasts and recommendations to the federal government. She is also professor of comparative economic research at LMU Munich. Her research and teaching focus on competition policy, innovation economics and multinational companies.

In an online conversation, Prof. Schnitzer presented the current economic forecast of the expert council. According to this, the experts expect an early recovery in the level of consumption: For 2020, the experts are still anticipating a decline in real gross domestic product (GDP) of 6.5 percent, explained Prof. Schnitzer. Next year, however, they expect a phase of recovery and positive growth of 4.9 percent. This should bring GDP back to pre-pandemic levels in 2022. The unemployment rate will continue to rise in the coming months and will only slowly decrease again in the course of 2021. The situation is similar in Europe, albeit with more pronounced fluctuations: For the euro area, the German Council of Economic Experts expects real GDP to decline by 8.5 percent in 2020 and positive growth of 6.2 percent in 2021.

When asked about the high debt burden of many EU countries, Prof. Schnitzer emphasized that grants from the EU aid package rather than loans are the means of choice to help the hard-hit crisis countries. However, these would have to be linked to conditions that can be met. Unlike many other EU countries, however, Germany can afford to take on new debt: With regard to the German economic stimulus package and its various measures, the expert stated that this could have a fairly broad effect.

However, the economist also pointed out that a significantly longer period of weakness could be expected if the number of new infections could not be kept low and the previous easing course continued. “It is important that we contain recurring infections in such a way that we can limit them locally,” said Prof. Schnitzer.

The webinar with Prof. Dr. Schnitzer in full length can be viewed HERE.