Insolvency versus business closure
Ministry clarifies Habeck’s bankruptcy statements
09/07/2022, 4:12 p.m
The Economics Minister does not cut a good figure when he appears on television. When it comes to a possible wave of bankruptcies, the Green politician starts to swim. His ministry improves in writing: Habeck had the difference between bankruptcy and business closure in mind.
Robert Habeck’s Federal Ministry of Economics has responded to severe criticism of the Green politician’s statements on the question of a possible wave of bankruptcies. A spokeswoman said in a written statement that the minister only wanted to make “the important difference” between insolvencies and business closures clear.
On Tuesday evening on the ARD program “Maischberger”, Habeck answered the question of whether he was expecting a wave of bankruptcies at the end of this winter: “No, I’m not doing that. I can imagine that certain sectors will simply stop producing for the time being .” He cited flower shops, health food shops and bakeries as examples because these shops “depend on people spending money”. Such companies would then have real problems because there would be a reluctance to buy. “Then they are not automatically insolvent, but they may stop selling,” said Habeck.
“Danger of silent operational tasks also in view”
The ministry spokeswoman explained that Habeck wanted to show that the risk of “silent business closures”, i.e. business closures without filing for bankruptcy, represents a problem for an economy and that the government must keep an eye on both. “Looking at the bankruptcies alone” does not go far enough. “The insolvency procedure serves to preserve the company as far as possible in a structured procedure. On the other hand, operational closures mean that companies give up without filing for bankruptcy, because they see, for example, that their business is simply no longer worthwhile due to high energy costs. Operational closure is not synonymous with of bankruptcy.”
Threatened operational shutdowns due to the high energy costs are “a serious problem, especially for small and medium-sized companies,” it said. Union politicians had previously reacted with great outrage to Habeck’s statements. Union parliamentary group leader Friedrich Merz accused Habeck of being helpless in the current crisis: “One can only hope that the majority of German medium-sized entrepreneurs and especially the bakers were already in bed and asleep at this time and didn’t have to watch it “said the CDU leader in the Bundestag.