Merkel Hints at Lockdown Extension as Deaths Surge to Record

(Bloomberg) -- German Chancellor Angela Merkel hinted that a hard shutdown that takes effect Wednesday will remain in force beyond January as the country’s daily death toll jumped to a record 910 people.

Merkel told lawmakers from her parliamentary caucus that Germany faces a new peak of Covid-19 infections next month and predicted that the first two months of 2021 will be particularly tough, according to a participant in the virtual meeting Tuesday. The nation is heading toward a seven-day incidence rate of 200 cases per 100,000 people, four times the level the government has determined to be manageable, she said.

Europe’s biggest economy begins a strict lockdown on Wednesday, with non-essential stores closed, employers urged to shutter workplaces where possible and parents encouraged to keep children away from school. The rules deliver a psychological blow after weeks of restrictions, and an extension could deepen the impact.

Even as the German government seeks to prop up the economy, the fallout from the pandemic will likely depress business activity and lead to company failures, according to the head of the DIW economic institute.

“One of the biggest risks for the German economy is a wave of corporate bankruptcies next year,” Marcel Fratzscher, DIW’s president, said in a Bloomberg TV interview. “It’s not the question of whether it’s going to come. It’s more a question of when exactly companies will fail,” he said, adding that the thinktank is forecasting a contraction in the German economy in the first quarter.

As the restrictions take effect, fatalities surged to more than 900 in the 24 hours through Wednesday morning, well above Friday’s previous record of 604 and taking the total beyond 23,000. The number of new cases rose by 21,456, to 1.38 million, according to data from Johns Hopkins University.

The seven-day incidence rate has risen sharply in the past few weeks and currently is at a peak of 180 per 100,000 inhabitants, according to the RKI public health institute. Officials have said the rate needs to come down to 50 and stay there to allow effective contact tracing.

Read More: Borders, Bavaria and Bust-ups: Germany’s Pandemic Missteps

As things stand, the stricter curbs will remain in force until Jan. 10, but the chancellor’s comments on Tuesday suggest they will be extended after her next meeting with regional leaders in early January. German law requires the government to reassess a nationwide lockdown every four weeks.

Merkel, who is due to address the lower house of parliament later on Wednesday, told her caucus lawmakers that it’s impossible to develop a long-term strategy to tackle the pandemic because there are still too many unknowns.

She appealed to regional leaders to stick to lockdown rules, warning that failure to do so would risk extending them even longer. She said it’s too early to tell when the pandemic will be over, dampening optimism that the expected European approval of a Covid-19 vaccine next week could quickly provide a way out of the pandemic.

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