Schleswig-Holstein's Service Industries in the Corona Crisis: Imminent Damage and Options for Economic Policy

The economic standstill decreed by the Schleswig-Holstein state government in the course of the Corona crisis ("Corona Decree") affects almost exclusively the service sector in the areas of "trade" and "consumer-related services". The authors note that in values of 2017, taxable turnover in the affected sectors amounted to almost 15 billion euros or 8 percent of the total turnover of Schleswig-Holstein. This means that a total of around 18 percent of taxpayers are covered by the decree, which is a consequence of the small-scale nature of the state's economy. Some 240,000 people are employed in the sectors affected by the "Corona Decree" - which means that almost one in five jobs in the state is directly affected. The districts of North Frisia and East Holstein are the most affected in a regional comparison due to the high importance of tourism and the associated retail trade. From the authors' point of view, the state support services are necessary and helpful despite the burden on households and the risk of deadweight effects. However, it should be short-term bridging aids only for a very short period of time, as state resources are finite. They demand that, as a next step, exit scenarios from the economic (partial) standstill should be drawn up with the aim of gradually opening up individual sectors and companies affected by the "corona closure".

Kiel Institute Experts