BERLIN (Reuters) – Germany must avoid another shutdown of industrial activity, Economy Minister Peter Altmaier said on Monday as rising COVID-19 infections cloud the growth outlook for Europe’s largest economy.

The German economy contracted by a record 9.7% in the second quarter as measures to contain the spread of the pandemic brought public life and business activity to a near standstill from mid-March to late April.

An easing of lockdown measures, coupled with an unprecedented array of rescue and stimulus packages, has led to a robust recovery in the third quarter, but a spike in new COVID-19 cases has caused concern that activity could slow once again.

“There mustn’t be a second shutdown. And as far as it’s up to me, there won’t be a second shutdown for industry,” Altmaier told a business conference in Berlin organised by the BDI industry association.

In contrast to many other European countries, Germany did not impose a lockdown on factories during the first wave of the pandemic while ordering the closure of schools, universities, restaurants, bars, cinemas and theatres to curb the spread of the novel coronavirus.

But many manufacturers closed their production sites anyway to protect employees, and because disrupted supply chains and missing components made production impossible.

Altmaier said the focus in fighting the pandemic had now shifted to detecting and ring-fencing local infection chains, with family gatherings and private parties proving particularly problematic.

But he admitted that health authorities in some parts of the country were overwhelmed, and struggling to keep up with contact tracing and breaking infection chains.

Asked whether the pandemic would lead to another debt crisis in Europe, Altmaier said he wasn’t concerned about this because most countries were now in a better position than 10 years ago in the aftermath of the global financial crisis.

But he voiced some concern about the debt levels in Britain and the United States.

(Reporting by Michael Nienaber; Editing by Pravin Char)

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