Germany

The International Monetary Fund has found that government support is keeping roughly one in ten German companies afloat that would otherwise have gone bust during the coronavirus pandemic, Reuters reported. In a report that on Tuesday laid bare the scale of economic damage masked by state aid, the Fund also warned that, once support was unwound, bankruptcy could soar, potentially weakening Germany’s banks. The analysis said the pandemic impact was worst for hotels and restaurants, where almost a third of loans could have gone unpaid without state relief.

Read more

Germany’s upper house of parliament called on Monday for Chancellor Angela Merkel’s government to extend a waiver on insolvency filings for firms hit by the coronavirus crisis, Reuters reported. The provision, which is due to expire at the end of the month, has helped reduce the number of bankruptcies in Europe’s largest economy through lockdown, with the Federal Statistics Office last week reporting a 31.9% year-on-year drop in October.

Read more
Birkenstock, the German company behind the iconic sandals worn by hippies and preppies alike, is in talks to be taken over by CVC Capital Partners, Bloomberg News reported. The private equity firm is in advanced negotiations with the family owners of the nearly 250-year-old brand. A deal could value the business at more than 4 billion euros ($4.8 billion) including debt, the people said. While Birkenstock launched its sandals in the 1960s, the brand’s roots stretch all the way back to 1774, when Johann Adam Birkenstock was working as a cobbler in the German state of Hesse.
Read more
A German court in Braunschweig, Germany, said on Friday it had halted criminal proceedings against former Volkswagen CEO Martin Winterkorn for alleged market manipulation as part of the carmaker’s emissions scandal, Reuters reported. The court said that it had decided to discontinue the proceedings as the expected sentence in another case, in which Winterkorn faces charges for his role in allowing diesel cars with excessive pollution levels to hit the road, was higher.
Read more
Germany’s economy is limping into 2021 heavily bruised by the pandemic, deeply reliant on government aid -- and in better shape than most of the euro zone, Bloomberg News reported. The nation will probably say on Thursday that gross domestic product contracted less than 6% last year, and may signal that it actually grew in the final quarter. In contrast, economists estimate full-year declines of around 9% for France and Italy and more than 11% for Spain.
Read more

The local court of Aschaffenburg today approved the application of Adler Modemärkte AG and opened preliminary insolvency proceedings in self-administration pursuant to Section 270b (1), (2) of the German Insolvency Code, new version, according to a press release. Within the scope of the preliminary self-administration, the business operations of Adler Modemärkte AG shall be continued in their entirety and the company shall be restructured by means of an insolvency plan. The management board of the company will continue to have the power of administration and disposition.

Read more

The number of corporate bankruptcies in Germany experienced a “noticeable” increase compared with pre-pandemic levels at the end of last year, though not as bad as feared, Bloomberg News reported. It’s the first snapshot of the country’s regular insolvency trends following a temporary suspension of filing requirements as part of Germany’s pandemic support measures. In December, 921 partnerships and corporations in the country were reported as bankrupt, just under 30% higher than in the previous three months, according to a report by the IWH Halle Institute for Economic Research.

Read more
Just a week into the job, Commerzbank’s new chief executive on Friday made a 1.5 billion euro ($1.84 billion)goodwill write-off at the German bank and raised risk provisions relating to the coronavirus pandemic, Reuters reported. Shares in Germany’s second largest bank fell 3% after the announcement by new chief executive Manfred Knof, which was seen as an indication that Commerzbank will post a larger loss than analysts had been expecting.
Read more

Germany wants to extend beyond January a freeze on insolvency rules put in place to avoid a wave of corporate bankruptcies due to the coronavirus pandemic, Justice Minister Christine Lambrecht told the Handelsblatt newspaper, Reuters reported. Last March, the government offered respite to companies that find themselves in financial trouble due to the pandemic by allowing them to delay filing for bankruptcy until the end of September.

Read more
German retail sales rose in November and jobless numbers fell last month, against forecasts that both readings would worsen, suggesting that parts of Europe’s largest economy have weathered the impact of the coronavirus unexpectedly well, Reuters reported. Retail sales rose 1.9% in November, when markets had anticipated a contraction, the Federal Statistics Office said on Tuesday, adding that it expected sales to have grown around 4% during 2020 as a whole - exceeding 2019’s 3.2% expansion.
Read more