GDP is expected to decline 4.5% in Q4 2020

If all goes as planned, the growth forecast for 2020 is expected to remain the same as for July with GDP declining by around 9% compared to 2019.

After the strong rebound (18.7%) recorded in the third quarter following the first containment, growth should contract by 4.5% between October and December, estimates INSEE in its economic report for November. Experts, who have hitherto evoked a decline of between 2.5 and 6%, see it a little clearer on the impact of the second wave, basing their estimates on the government scenario of exit from the reconfinement. Result: if all goes as planned and the epidemic continues to decline, growth forecasts for 2020 should remain the same as those for July with a decline in GDP of around 9% compared to 2019. “On the one hand, the first deconfinement led to a more vigorous economic rebound than expected. On the other hand and in the opposite direction, the resurgence of the epidemic weighs on economic activity in the fourth quarter“, Judges INSEE.

In detail, the November containment – lighter – should weigh less on activity even if the losses remain significant. Activity is expected to be 12% lower than its pre-crisis level, down from 30% in April. As for the month of December, the rebound promises to be less “lively“Precisely because of this smaller drop in November, and the more gradual easing of restrictive measures with, for example, the closure of restaurants until January.

The “choc”On household consumption, on the other hand, remains close to the first confinement with a drop of 14%. It is a fact: even though households are making greater use of home delivery services, restrictions such as the closure of businesses deemed “non-essentialHave affected demand in some sectors. In December, the rebound in consumption should also be more gradual than in the spring, due to the gradual lifting of barrier measures.


Income inequalities in France are lower than in Europe, even before redistribution, according to France Stratégie

The organization attached to Matignon tries in a report based on data from 2017 to “clarify” the lively debate around inequalities.

France is one of the countries in Europe where income inequalities are the lowest, even before redistribution via taxes and social benefits, according to a report from France Stratégie which wants “clarifier»A lively debate. This report, published on Wednesday, which is based on 2017 data, does not take into account the impacts of the health crisis, while the epidemic and its economic consequences raise fears of an increase in inequalities.

This subject is also the subject of intense controversy between economists on the extent of inequalities, their origin and the way in which States can reduce them, with the sights set on oppositions on the level of public spending and compulsory levies. deemed effective and acceptable. A debate fueled in particular by the work of Thomas Piketty, who is particularly interested in the gaps between the highest and lowest incomes.

«Our objective is to clarify this debate, to situate the level of inequalities in France compared to other countries, and to see among these inequalities what comes from primary inequalities (income inequalities before redistribution) and what comes from redistribution», Explained Gautier Maigne, director of the society and social policies department of France Stratégie, during a press videoconference.

A political choice

Conclusion of the study, “it is not because we would have very high primary inequalities in France that we would be obliged to redistribute a lot». «We made a political choice to redistribute a lot», He believes. In fact, the study shows that primary inequalities in France are 2% lower than the European median and that of 19 of the 29 other European countries analyzed (excluding Germany, not included in the study due to lack of data).

It uses as a criterion the Gini index, a coefficient which measures inequalities between 0 and 1, 1 corresponding to the maximum level of inequality. These inequalities are assessed by comparing the primary incomes of individuals (essentially earned income including social contributions, pensions, income from assets).

While the unemployment rate in France, which is higher than elsewhere, increases inequalities, this phenomenon is offset by a lower proportion of inactive people in the working-age population (people not looking for work, students, etc.). Similarly, income inequalities from assets are lower in France, as are income inequalities between men and women.

In addition, redistribution measures reduce inequalities more in France than elsewhere in Europe, notes France Stratégie. “This result is obtained half by the effect of social benefits in cash (housing allowances, unemployment, etc.) and half by direct compulsory levies on households (income tax, housing tax, etc.)», Explains the study. But this is mainly explained by the importance of the redistributed volumes, rather than by the targeting of this redistribution, underlines the study.

Note that this study does not take into account the tax reforms on capital decided by Emmanuel Macron and applied from 2018 (flat tax, transformation of the ISF).

Better target

Thus, if social benefits are a little more targeted in France than elsewhere for a volume that is barely greater, the volume of compulsory contributions is significantly higher in France, since it represents 37% of primary household income, against 34%. for the European average, and with identical targeting.

France Strategy, a body attached to Matignon and responsible for advising the government, therefore considers that France has “room for improvementTo improve the efficiency of redistribution, mainly by increasing their targeting. Certain countries like Denmark thus manage to reduce their income inequalities more than France, despite a higher level of primary inequalities. Better targeting could make it possible either to reduce the volumes transferred without increasing inequalities, or to further reduce inequalities without increasing the masses transferred.

The first prospect would have something to satisfy those who plead for a moderation of public spending or a reduction in compulsory levies. The second option would go in the direction of greater effectiveness of public policies in the fight against inequalities.


Morality and democracy: camps become enemy territory

Scientists measure, politicians have to act: Federal Health Minister Jens Spahn (CDU), Christian Drosten (center), Director of the Institute for Virology at the Charité Berlin and Lothar H. Wieler (left), President of the Robert Koch Institute
Image: dpa

The crisis throws things upside down when it comes to the relationship between science, morality and democracy. The moral recoding of political conflicts does not make it easier for citizens to work as saviors of democracy. A guest post.

MI can hardly hear it anymore, and even less write: “The” democracy is facing great challenges, is in turbulence, reveals its vulnerability, is under stress. It loses its popularity, drifts, shifts, suffers. Who should be surprised that armies of therapists, helpers, scouts and guides are now setting out to save democracy? We are currently experiencing a start-up boom in science, civil society and politics, especially in their gray areas. Projects, initiatives, democracy laboratories and democracy institutes are springing up from the ground. Political scientists, sociologists, economists, philosophers and demonstrators stand ready to offer their services to democracy. The federal government is providing generous funding, soon through the “Military Democracy Promotion Act”, endowed with 1.1 billion euros until 2024. As always in boom times, some chaff mixes with the wheat.

There is little reflection on a problem that emerges in the “new crises” of the 21st century: How is the relationship between science, morality and democracy changing? To many it seems tricky to work out or even to name the mutual dangers. This is exactly what is supposed to happen here. To what extent, so the question, actually support or limit science and morality the principles, procedures and political outcomes of democracy?


Ball: Without balance you do not get out of this crisis

Baiko and Aspe are immersed in a complex period to which companies from other sectors are not strangers, among which some cannot even maintain activity due to measures to curb the pandemic. The television contract allows the professional ball to keep going even if the box office income has fallen to zero in the last month. The promoters delayed the resolution of the Couples Championship and the Manomanista dispute to fall in the hope that the public restrictions would be relaxed. They have grown frog. They have collided with a second wave of coronavirus positives that deprives them of two of the best pieces of cake of the year: the full ones in the finals of these two tournaments.

No one is able to discern how long this crisis will last. Limitations of a greater or lesser degree will continue. Aspe reached an agreement with his pelotaris to adapt their emoluments to the current economic situation of the company. Baiko has also adjusted employee salaries.

The duration of the contract between Euskal Telebista and Bainet, which owns the rights to Baiko and Aspe, extends until 2023, which gives a buffer to two companies under an ERTE between March and June. ETB’s management is aware of the difficult situation. After a strike in Baiko that shook the structure of the LEP.M, holding on seems essential to think about a viable future that requires the review of various sections, also sports.

Overcoming this crisis requires paying attention to what is happening on the pitch. Aspe today chained his eighth consecutive title in major competitions, at the expense of what the final of the longest Couples Championship in history holds. The worst thing for Baiko is that he has not placed anyone in the semifinals and that the difference between the two squads does not stop growing. Balance has been and will be fundamental on this journey. Someone must maneuver yes or yes in search of real competition.


A liberal, new president of Peru to unblock the political crisis

Peru seems to see the light already within the worst political crisis in which the country has been plunged in two decades. Francisco Sagasti, from the Purple Party – which he himself founded and of a center-liberal tendency – will be the next president of the country and will assume the vacuum due to the resignation of the interim president Manuel Merino, forced to resign on Sunday after the brutal repression of popular protests which caused two deaths. The Legislature failed in its first attempt to find a new candidate, although finally this Monday it achieved sufficient support for the person who will have to take the reins of the country until the April 11 elections.

Francisco Sagasti, 76, was actually elected to preside over the table that runs the Congress and, at that time, will act as provisional president of Peru until the new elections. He obtained 97 votes in favor compared to only 26 against, well above the 60 he needed to be elected. On Sunday, the single list of the leftist deputy Rocío Silva failed in a similar attempt, with only 42 supporters. In turn, the new president of the Chamber will be Mirtha Vásquez after the resignation of Luis Valdez.

Opposed to removal

Sagasti is a figure of relative consensus, well regarded by both the left and the right, and with a profile that can help reassure a citizenry who is jaded with the political maneuvers evidenced by the parties that imposed the removal of Vizcarra and the inauguration of Merino. . He was one of the few deputies (only 19 of 130) who actively and passively opposed this dismissal due to its illegitimate, destabilizing nature and its estrangement from the popular will, which in the end has corroborated the facts.

An engineer by profession, a university professor and also a former technical adviser to the World Bank, he will apparently have more facilities than his predecessor in assembling a “broad-based” cabinet to ensure a peaceful transition of power in July. It will be missing after the House has removed the previous president for “moral inability” to remove him, a controversial figure on which the Constitutional Court is expected to rule and whose late ruling raised concern on Monday that it may generate new controversies.

Martín Vizcarra, who called Merino (his successor) a “little dictator” for consenting to the repression of the protests, argued that his departure “does not solve the problem” since the people demand “to recover democracy and institutionality.” The Prosecutor’s Office, however, is already investigating the resigned interim president, his chief of staff and the Interior Minister for the death of the two protesters.


665 new coronavirus infections and 6 deaths on Tuesday in Vienna – Coronavirus Vienna

665 new coronavirus infections were reported in Vienna on Tuesday.
© APA (Sujet)

On Tuesday, 665 new coronavirus infections were reported in Vienna. There were also six deaths in the past 24 hours. This emerges from the published data of the city’s medical crisis team

So far, a total of 60,094 coronavirus infections and 623 deaths due to or from the consequences of Covid-19 have been documented in Vienna. Most recently, two women and four men died between the ages of 78 and 95.

Currently 10,564 people are actively affected by the disease. 48,907 people are healthy again. 7,084 tests were carried out yesterday, Monday. A total of 837,228 tests have been carried out in Vienna since the beginning of the pandemic.

>> More news and information about the corona crisis


366 new coronavirus infections on Tuesday in Lower Austria – Coronavirus Vienna

366 new coronavirus infections were reported in Lower Austria on Tuesday.
© APA (Sujet)

On Tuesday, the Lower Austrian state medical staff reported 355 new coronavirus infections within the past 24 hours. However, around 140 other cases that were only communicated during the night and therefore no longer included in the list will be reported tomorrow, Wednesday.

21,196 contact persons were in quarantine in the state. On Monday it was 21,368.

>> More news and information about the corona crisis


global growth will rebound thanks to vaccines, says OECD

INFOGRAPHICS – After a massive shock in 2020, the OECD forecasts a 4% GDP recovery next year, while highlighting risks and great uncertainty.


The prospects of an arrival, faster than expected, of anti-Covid vaccines, give hope. The OECD, which published its new forecasts on Tuesday, sees the light at the end of the tunnel. Anticipating a drop in global GDP of 4.2% in 2020, the Paris-based international organization expects an equivalent rebound next year. The figure is a little less positive than last September (4.5%). But in the meantime a second wave of Covid-19 has swept through which has resulted in new lockdowns. At the same time, the latest news on the health front – the Moderna laboratory submitted an application for authorization of its vaccine in the United States on Monday – are encouraging. “Overcoming the virus is the only effective way to protect the economy and protect populations from social repercussions,” insisted Angel Gurria, secretary general of the international organization. From this point of view, 2021 promises to be still difficult and very uncertain. Activity will be slowed at least at the start of the year by the distancing measures and the partial closure of borders. And it will take several months to roll out vaccination on a large scale. The OECD also recalls the importance of having effective virus screening, tracing and isolation programs.

Pointing out the great uncertainty and the many downside risks, the institution projects on either side of its central scenario two trajectories of wealth growth by 2022. Between the optimistic and the pessimistic forecast, the difference in world GDP is numbered. to $ 7 trillion. The trajectory will depend on the speed with which the vaccine is deployed, the maintenance of aid policies, and the renewed confidence of households and businesses. Compared to the growth projected before the crisis, at the end of 2022, “we will have lost the equivalent of the combined GDP of France and Germany”, supports Laurence Boone, the chief economist.

La Muette experts highlight the great heterogeneity between countries. China, where the pandemic started at the end of 2019 and which has managed to bring it under control more quickly, will be one of the few economies to escape the recession (+ 1.8% expected this year). In Europe, Great Britain and Spain will record the largest drops, followed by France and Italy. French GDP will fall by 9.1% – against 5.5% in Germany – before rebounding 6% next year. “France, Italy and Spain were affected earlier than Germany,” notes Laurence Boone. Containment there was stricter when construction, for example, was still operating in Germany. Other factors have played a role: the effectiveness of public health policies and the greater weight, particularly in southern Europe, of hard-hit sectors such as tourism. Open economies, dependent on foreign trade and investment, are also more vulnerable, says Angel Gurria. Citing the United States, “the most self-sufficient country in the world”, which will experience a GDP drop of 3.7%, half as strong as in the euro zone.

Priority to youth

The main message to leaders is to maintain aid policies until the recovery is solid, targeting vulnerable populations. In the United States, Laurence Boone illustrated in her presentation, between February and August, 50% of low-income people could not pay their bills and a third had to seek help from food banks. Be careful, argues the economist, not to reproduce the error of 2008, by imposing too quickly budgetary restrictions at the risk of breaking the recovery.

Youth must be the priority. “We must focus on young people entering the labor market and students from disadvantaged schools” so as not to further widen the inequalities that begin at a young age: a 5-year-old child from a disadvantaged background, recalls the He OECD knows 120 words, five times less than a child from a wealthy background.

SEE ALSO – Covid-19: Air France is preparing “99 long-haul planes” to deliver vaccines


Bundesbank Vice-President Buch: “The situation is distorted”

Ms. Buch, in every crisis it says: “This time is different.” What is different in the Corona crisis than in 2008?

Thomas Klemm

Editor in the “Money & More” section of the Frankfurter Allgemeine Sonntagszeitung.

In contrast to the financial crisis, this time all countries in the world are affected, albeit to different degrees. And it is a health crisis that is having a massive impact on the real economy. In the global financial crisis, the financial sector was the culprit.

This time banks are not causing problems?

We don’t have a crisis of confidence like we did in 2008. In the spring it became apparent relatively quickly that the financial sector was working, there was no credit crunch. This was due to the expansive fiscal and monetary policy. The financial sector has been protected so that the massive shock in the first phase did not reach it that much. Write-downs and write-downs on loans have so far been very low. That should change in the near future.

Will the number of bankruptcies skyrocket if the suspension of filing soon expires?

The situation is distorted at the moment. Bankruptcies do not appear in the statistics until proceedings are completed. At first glance, the numbers still look good – but only because many proceedings are being postponed. It will not stay that way and sectors will be affected to varying degrees.

Who will it hit especially hard?

In relative terms, we expect a strong increase in manufacturing. In terms of services, the increase is likely to be even stronger. However, we are starting from a historically low level – during the financial crisis the number of bankruptcies was around 8,000 per quarter. In any case, increasing bankruptcies, but also business de-registrations, will lead to value adjustments at the banks.

If one reads a few passages of the latest financial stability report, one could sum up pointedly: The big end may still come.

We also consider such a case, but not as a base scenario, but as an adverse scenario. This would put the financial system under greater stress: the banks would have to realize unexpectedly high losses and write-downs. That would put their equity under pressure. Banks could then cut back on their business and lend less to stabilize their capital ratios. As a result, there would be a threat of negative contagion to the real economy. That is exactly what we want to prevent. Thanks to the reforms since the financial crisis, banks now have larger capital buffers. They can use these to extend loans.

How much lockdown can the real economy and financial system still take?

There are a lot of uncertainties. In the summer we developed a basic scenario in which we took into account a certain ups and downs. That would be easily manageable by the financial system. The banks have sufficient buffers. But banks and public authorities should also prepare for more negative developments and dealing with higher bankruptcies.

Are the banks stable enough that taxpayers don’t have to prepare for the worst like 2008?

A lot has happened since then. We have a lot more capital buffers in the system. Large banks had to build up additional equity. In addition, new institutions have been established for the resolution and restructuring of banks in distress. All of this protects tax funds. It is also important, however, that the new rules are applied if banks go into difficulties.

Do the banks weigh themselves in a false sense of security because for many years there have been very few bankruptcies and thus loan defaults?

I wouldn’t say that the individual banks have become negligent. You have to realize that the current situation is far from good.

People are now less disciplined than they were in spring. Does that also apply to banks in terms of bonuses and dividends?

Basically it’s similar: today you want to do beautiful things, go out to eat, meet friends or travel. With this joint renunciation, we are investing in the stability of the health system. It is similar in the financial system: distributions are postponed to invest in the stability of the financial system. There is so much uncertainty that banks should do whatever it takes not to weaken their resilience now. They can always pay dividends later if the worst hasn’t happened. It doesn’t work the other way around: once dividends have been paid out, they don’t bring them back.


How corporations convey bad news

Thyssen-Krupp shipyard in Kiel

The group asked its suppliers to “adjust the contractual terms to the current market situation”.

(Photo: dpa)

Düsseldorf Even the subject line of the letter suggests evil. A few weeks ago, the Thyssen Krupp Group’s shipyards announced that they would “adjust the contract terms to current market conditions” in a letter – and requested a price reduction of around five percent.

The world has changed significantly as a result of the corona pandemic, the company campaigned for understanding in the letter that Handelsblatt has received. “This multiplies the cost pressure as a result of the Covid-19-related macroeconomic situation.”

But the shipbuilder did not meet with understanding. Instead, the addressee, who would like to remain anonymous, turned to the Handelsblatt and asked: “Is this the new way of dealing with each other in the economy during Corona?”

A similar situation in another company: In the summer, the SMS Group sent a letter to its retirees to inform them that the company pensions “due to the macroeconomic effects of the corona pandemic and the difficult economic situation of the company in recent years” would not be adjusted this year. Here, too, a surprised recipient turned to the Handelsblatt.

Thyssen-Krupp Marine Systems and SMS are just two examples of many companies that have had unpleasant conversations these days. The economic consequences of the pandemic are forcing many of them to pursue strict austerity measures. Suppliers, customers and employees are also increasingly feeling this.

Impersonal speeches, too little empathy

The senders don’t always hit the right note. Impersonal addresses, too little empathy and formulations that don’t get to the point are common mistakes that, in addition to the negative message, can cause avoidable displeasure in the recipient. Experts therefore advise to think carefully beforehand how the message can be conveyed so as not to annoy partners.

Communication expert Hartwin Möhrle, to whom the Handelsblatt submitted both letters, thinks that this has obviously failed at Thyssen-Krupp and the SMS Group. “Because of the bureaucratic style, the actual negative news reaches those affected even worse than it should be,” says the partner and co-founder of the Frankfurt communications agency A&B One.

One can get the impression from the letters that the companies are only concerned with getting rid of an annoying message, but not with real understanding of the recipient’s situation.

Communication always takes place on two levels, explains Möhrle – on the content and the relationship level. With the latter, the way in which bad messages are conveyed plays a very important role at the moment. Because in the current crisis everyone can objectively understand that difficult decisions have to be made.

Hartwin Möhrle

The communication expert recommends simple communication that is easy to understand and understand for the addressee.

(Foto: PR)

Companies should therefore communicate clearly and simply and get straight to the point. This is the chance to minimize the damage to the relationship, according to the Frankfurt expert.

The Thyssen-Krupp subsidiary Marine Systems, for example, writes that a “contribution to cost relief” is necessary and calls for a “price adjustment”. Möhrle believes that this is too bureaucratic and too stilted. Better: speak of the fact that “prices have to be lowered”.

The company explains why the price reduction is necessary in several paragraphs, the expert analyzes. One section would suffice – less prose, more facts. Möhrle’s suggestion: “The crisis forces us to act. We ask for your understanding that we can no longer maintain the current conditions. “

The main aim of such letters should be to send a sign of trust and continuity. At Marine Systems, Möhrle misses out on that. At just one point does the company say that the partners can rely on “our reliability and stability”.

“If companies want to pay less money for services, they should at least make it clear that they are interested in a long-term continuation of the cooperation,” says Möhrle.

When asked, a Thyssen-Krupp Marine Systems spokesman said: “We only ever get our orders in competition, so our suppliers have to support us in winning this competition.”

In return, partners benefit from the fact that around two thirds of the order volume is awarded to suppliers. “Like other companies, we also have to adjust current orders if the market situation changes,” the company said.

Expert advises expressing regret

Another common mistake: a lack of empathy. In the letter from the SMS Group, for example, the word “unfortunately” only appears in one place. The company could at least express its regret about the decision, says expert Möhrle. After all, the letter is addressed directly to the people concerned.

A completely different approach is necessary, says the communication expert: “We know that it’s not a nice message. But the current crisis is forcing us to take unusual measures. We very much regret that no increase in company pensions is therefore possible. “

In response to a request, the company pointed out that the next audit of company pensions will take place in 2023. Then SMS will have come a good step closer to its growth target, said a spokesman.

When it comes to difficult decisions, Möhrle advises against simply writing a letter or an email. It is much more important to seek a personal conversation in advance, to give understandable classifications and to announce that a letter will be delivered that summarizes the matter again. “Even if it is uncomfortable, it usually ensures more clarity in the matter and more trust in the relationship,” says Möhrle.

In the case of Thyssen in particular, it is conceivable to talk to the partners concerned in advance. The fact that the SMS group addresses every single pensioner is certainly difficult. But there are also ways and means, says Möhrle. “With the increasing use of the Internet by older people, a video message can also be a good means of communication.” Sure, that takes more time, “but the effort is worth it”.

More: Managers should avoid these mistakes when negotiating