Why this is important to Wisconsin businesses: The current situation in Germany, Italy and Spain, plus where to turn for further updates
In Germany, all major trade events have been canceled since March 2020, and a ban on all major events (with more than 1,000 people) has been extended through Aug. 31. Presently, all international travel has been suspended at least through June 14, aside from certain special exceptions. Thus, regular business trips to Germany are currently not possible. For German citizens and foreigners with permanent residence in Germany, a 14-day quarantine-at-home requirement applies when returning from abroad. Restrictions are reviewed by the German government every two to four weeks. Current information on travel restrictions can be found at: https://www.auswaertiges-amt.de/en/einreiseundaufenthalt/coronavirus The US embassy in Germany also provides short status updates: https://de.usembassy.gov/covid-19-information/
Major multinational companies that had shut down their production in March have restarted production now, employing new protective measures. However, the temporary shutdown of production and the restart at lower capacity will have consequences. Experts expect German GDP to drop by 6.6 % in 2020. For 2021, currently a recovery and corresponding growth of 8.5% is expected.
Italy was one of the first countries affected by COVID-19. As the virus spread beyond the health care system’s capacity to respond, , the Italian government imposed a lockdown in early March, also shutting down all businesses not producing or supplying vital goods such as food processing, pharmaceutical products, logistics, financial institutions, electricity, gas, water and waste disposal. Business travel to Italy is currently possible only if urgent, and under specific restrictions. When entering Italy, contacting the local health authorities and entering a 14-day quarantine is mandatory. An English summary of current restrictions applying can be found at the US Embassy in Italy: https://it.usembassy.gov/covid-19-information/ Especially hard hit by the virus was the Lombardy region in the north of Italy, a traditional economic center with major companies, especially in the machinery sector. Lombardy had been under even stricter restrictions, with a temporary shutdown of the majority of businesses, but production has now restarted, with the reopening occurring step by step to protect employees. Due to the long shutdown, Italy’s economy has suffered enormously. Experts predict a decline of Italian GDP by around 9.1 % for 2020. For 2021, growth of 4.8 % is predicted.
Like Italy, Spain imposed a lockdown with strict restrictions as a reaction to the severe outbreak of COVID-19 that strained the health care system. Consequently, all travel activities have been suspended, with business trips prohibited and no direct flights between Spain and the U.S. When entering Spain, a 14-day quarantine is mandatory. The Spanish government has created a four-phase plan for easing current restrictions, with each phase lasting between two and eight weeks, depending on the epidemiological curve. Each of the 19 territories will move through the phases at its own rate based on local conditions. Further information on current conditions in English is provided by the U.S. Embassy in Spain at: https://es.usembassy.gov/covid-19-information/ The Spanish economy has suffered greatly from COVID-19. Having experienced slow growth in the past five years after the last recession, the economy is now facing strong decreases in demand as well as strict government restrictions that partly impede economic activity. This is especially apparent in the automotive industry, which was among the first to shut down production in early March and had already been struggling beforehand. As Spain is heavily dependent on tourism, the expected ongoing restrictions in this area will also strongly affect the economy. Currently, a drop in GDP of 8% is expected for 2020. For 2021, current forecasts project a recovery with growth of 4.3%.
Many European companies are expected to regionalize their supply chains to minimize the risk of supply chain interruption. As the situation develops, it is a good idea for Wisconsin companies to monitor the information provided by U.S. embassies in Europe. Further information in the local languages may be found on the official government websites: