Kempen's Commentary: Corona (im)possibilities
It’s holiday time, and the coronavirus has forced many families to cancel or change their plans for this season. There is much debate among economists as to whether the corona crisis is inflationary or deflationary. It’s especially inflationary for holiday homes in the Netherlands. I heard that many houses are fully booked and prices are skyrocketing.
Our family went to Spain. My in-laws have an apartment on the Costa Blanca, so we were flexible. On the outward journey I got dropped off in the Pyrenees and cycled around there for a week. I made reservations for hotels a day in advance, which went impeccably with reasonable prices. So, where demand is increasing less rapidly, there is no inflation. My journey started in Seissan in France and eventually passed ten mountain passes to arrive in Huesca in Spain. Beautiful weather, beautiful surroundings and a lot of climbing. The atmosphere in France was pleasant, it’s difficult for me to judge whether it was less busy than usual. When I descended Tourmalet after an early climb, many cyclists were going up. In France, masks were worn in shops, cafes and restaurants; not on the streets. As my tour progressed, I got in a hurry. In Aragon, the Spanish province in which Huesca is located, the virus re-emerged and I did not want to end up in a local lockdown. But when I arrived, the terraces were open and reasonably occupied as well. In Spain, a mask is also mandatory on the streets. Eventually I was able to travel to my family on the Costa Blanca with my rental car. I will work a week from here, after which another two weeks of holidays will follow.
The damage of the coronavirus is clear: the American and German economies shrank by about 10% in the second quarter, 12% in Italy, 14% in France and 18% in Spain. During my bike ride, I saw that we learn to live with the virus and the limitations that go with it. Daily life is picked up again nicely, but it will take a while before we can return to normal levels of economic activity. Here in Spain, the tourist season is a lot calmer than usual.
But this crisis also opens up new possibilities. Employees who were forced to stay home, and could work there during lockdowns, quickly adapted to the new circumstances. It’s something that’s more accepted now than before and there is a chance that more employees will continue to work from home in the future. This may lead to fundamental changes, such as less commuter traffic, less business air travel and less demand for office space. It is of course still too early to say whether this situation will stay like this. After all, if most colleagues are back in the office, it may become less attractive to work from home a lot.
Not working in the office all the time gives some employees unprecedented possibilities. For example, it’s no longer necessary to live near the office in an expensive city. The island state of Barbados offers remote workers the opportunity to work fiscally attractive in this tropical paradise for a year. I myself think that working from another country for a week is worth repeating. I fully realise that this luxury is not for all employees, but it does show that the corona crisis is not only about impossibilities.