The Coronavirus Crisis versus Social and Market Economy of Germany

Abstract

The coronavirus crisis caused by the COVID-19 pandemic has had a significant negative impact on all aspects of the German social market economy. For the first time in history, the crisis was caused by factors of a non-economic nature. They manifested themselves in all economies of the world, including Europe. Since March 2020, the federal and state executive authorities of Germany, along with the introduction of restrictive measures for the population and business, have adopted several large-scale economic and political programmes aimed at preventing bankruptcies of economic entities, preserving jobs and social stability in the country. Along with short-term instruments designed to stop the decline in GDP and give impetus to its growth, the German state pursued an active and coordinated with Brussels structural policy aimed at ensuring an energy and digital transition to a climate-neutral economy, including the overcoming the deficits and problems revealed by the pandemic in the country's economy. To this end, Berlin abandoned the budget surplus policy and switched to large-scale external borrowing to finance programmes to bring economy out of the crisis. The author analyzes the results of the impact of the coronavirus crisis on the economic space of Germany, including aspects of its stress resistance and competitiveness, explores the effectiveness of state policy to counter crisis and assesses the prospects for the development of Russia's leading foreign economic partner in the west of the Eurasian continent.