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EUROPEAN UNION

Berlin expecting worst post-war recession

Berlin forecast on Wednesday that Germany will suffer its deepest post-war recession this year just as Chancellor Angela Merkel's cabinet chewed over a historic rescue package aimed at boosting the economy.

Berlin expecting worst post-war recession
Photo: dpa

Germany’s economy, which accounts for about a third of eurozone output, will contract by around 2.25 percent in 2009, the government said, as the sharp global slowdown hits demand for the country’s all-important exports.

“For this economic downturn that we are unfortunately having to predict is without precedent in the postwar period, it is the biggest slump in Germany’s recent history,” Economy Minister Michael Glos told a news conference.

“The German economy is facing this year the greatest challenges since unification (in 1990). Germany is integrated into the global economy like hardly any other industrialised country.”

The new forecast came as Merkel’s cabinet discussed on Wednesday Berlin’s latest effort to help the world’s biggest exporter avoid the worst: a €50-billion ($65-billion) stimulus effort.

The package, the biggest in modern German history, includes a huge increase in spending on roads, railways, hospitals and schools. Other elements include cuts in tax and social security contributions, as well as incentives for consumers to buy new “greener” cars to boost Germany’s ailing auto sector.

Glos said that this programmes, together with similar efforts being made around the world, would begin to help the German economy in the second half of 2009.

Germany entered a recession in the third quarter of 2008 with two successive three-month periods of shrinking economic output. Preliminary official figures last week showed that the slowdown accelerated sharply at the end of the year, contracting by between 1.5 and two percent in the fourth quarter – the sharpest fall in two decades.

Unemployment hit three million in December, rising for the first time after almost three years of unbroken decline. Data have shown industrial orders and output falling off a cliff.

In recent years German exports have been its source of strength, but the global downturn has turned them into an Achilles’ heel – Glos forecast they would slump 8.9 percent this year.

Germany “is suffering more than other countries,” said Henrik Uterwedde from the Franco-German Institute (DFI). “The real motor of the economy has always been exports while domestic demand has tended to stagnate.”

Glos also forecast that the jobless rate would climb to an average of 8.4 percent over 2009 from 7.8 percent in 2008.

For members

VISAS

REVEALED: EU plans digital-only Schengen visa application process

Soon those non-EU nationals requested to have a Schengen visa to travel to European countries will no longer need to go to a consulate to submit the application and get a passport sticker, but will be able to apply online. 

REVEALED: EU plans digital-only Schengen visa application process

The European Commission has proposed to make the Schengen visa process completely digital.

The special visa, which allows to stay for tourism or business (but not work) in 26 European countries for up to 90 days in any 6-month period. 

Nationals of third countries such as South Africa, India, Pakistan and Sri Lanka need the Schengen Visa to visit Europe, but they are not needed for other non-EU nationals such as Britons or Americans. You can see the full list of countries who need a Schengen visa here.

The proposal will have to be approved by the European Parliament and Council, but is in line with an agreed strategy that EU governments are keen to accelerate in the aftermath of the pandemic. 

Once agreed, the system will be used by the countries that are part of the border-free Schengen area. These include EU countries, excluding Ireland (which opted out), and Bulgaria, Romania, Croatia and Cyprus (which do not issue Schengen visas). Iceland, Norway, Lichtenstein and Switzerland, which are not EU members but have signed the Schengen Convention, will be part of the new system too.

Paper-based processes required applicants to travel to consulates to submit the application and collect their passports with the visa, a procedure that “proved problematic during the COVID-19 pandemic,” the Commission said.

Some EU countries have already started to switch to digital systems but not all accept online payments for the visa fees. 

When the new system will be in place, the Commission says, applicants will be able to check on the EU Visa Application platform whether they need a visa. If so, they will create an account, fill out the application form, upload the documents and pay. 

The platform will automatically determine which Schengen country will be responsible for the application and applicants will be able to check their status and receive notifications. Travellers will then be able to access the visa online, and if needed extend it too.

“Half of those coming to the EU with a Schengen visa consider the visa application burdensome, one-third have to travel long distance to ask for a visa. It is high time that the EU provides a quick, safe and web-based EU visa application platform for the citizens of the 102 third countries that require short term visa to travel to the EU,” said Commissioner for Home Affairs Ylva Johansson.

“With some member states already switching to digital, it is vital the Schengen area now moves forward as one,” said Commission Vice-President for Promoting our European Way of Life, Margaritis Schinas.

However, first-time applicants, people with biometric data that are no longer valid or with a new travel document, will still have to go to a consulate to apply.

Family members of citizens from the EU and the European Economic Area, as well as people who need assistance, will also be able to continue to apply on paper. 

The EU Visa Application platform will be used from third countries whose nationals must be in possession of a visa to enter the EU and is different from the ETIAS (European Travel Information Authorisation), which is currently under development.

The ETIAS will be used by non-EU nationals who are exempt from visas but who will need to apply for a travel authorisation prior to their trip. This will cost 7 euros and will be free for people below the age of 18 and above 70. 

Based on the discussion between the European Parliament and Council, the Commission could start developing the platform in 2024 and make it operational in 2026. EU countries will then have five years to phase out national portals and switch to the common online system. 

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