Risk perception of German companies in difficult economic conditions

According to the international group Tasnim news agency, deadlock A budget created in the German government along with the deterioration of the economic situation has caused many concerns in this country as well as among European authorities. Greatness for German companies

Meanwhile, the lack of orders and the weak economy threaten German companies more and more. Some sectors are particularly at risk. Here is the question: Will more companies go bankrupt?

Wirtschaftswoeche, Germany, wrote in a report: The mood of companies in Germany is becoming increasingly cloudy. to be Following the economic recession and the continued risk of recession, one out of every 15 companies in Germany is worried about its survival. According to a survey by the Munich Ifo Institute on Tuesday, 6.8 percent of companies currently see their economic existence under threat. In the previous survey in January 2023, 4.8 percent had such concerns.

Claus Vollrabe, head of this survey conducted by the Ifo Institute, said: Economic weakness in increasing corporate bankruptcies. is reflected The Professional Association of Insolvency Administrators and Trustees in Germany (VID) has recently made similar statements. The main construction industry is at risk of failure increased from 5.1 to 8.9 percent. This is the highest value for construction since the question was first asked in June 2020. This survey shows that housing construction is in a deep crisis.

Klaus Vollrabe explained that this is causing some construction companies problems. . Due to the increase in interest rates and high construction costs, demand is now severely weakened and investors are canceling projects.

Results of this survey It also shows that, in particular, companies in the transportation and logistics sector (14 percent), staffing agencies (13.9 percent), and chemical energy industries (12.5 percent) report economic concerns. Retail sales are also severely affected – 10.3% of these companies see their economic existence threatened. Meanwhile, in January, about 8% had such concerns.

Accordingly, 35% of the companies at risk consider lack of demand or orders as a reason for threats. They stated their existence. 27% said the difficult economic conditions, 24% inflation and 14% current political actions as the reason for this issue. and experts believe that there will be a decreasing trend in the current quarter as well. This causes the economy to slip into a temporary – so-called technical – recession.

Big question mark behind arms aid to Ukraine

Meanwhile, German Defense Minister Boris Pistorius announced the delivery of new weapons to Ukraine. This cannot hide the fact that there is now another question mark behind this military aid.

Shortly after Pistorius took office in January, the decision to The supply of tanks to the Ukrainian army was taken. With the new “packages”, the Federal Republic subsequently became the second largest supporter of the country invaded by Russia. has increased Ukraine.

Brussels’ concern about the consequences of the budget deadlock in Germany

Recently, according to the ruling of the Federal Constitutional Court to suspend the budget applied to the Climate Fund, the German Federal Ministry of Finance has put the plan of suspending the budget for all ministries on the agenda, and this issue has led to a budget deadlock in Germany’s federal government has become.

The Federal Constitutional Court on Wednesday canceled 60 billion euros from the federal government’s budget because, according to the court, the plan to transfer unused corona loans The climate fund was against the constitution. The government now lacks this money.

Brussels is now very worried about the budget impasse of the German federal government. According to the European Commission, this lack of investment can have consequences for the entire Eurozone. Germany has warned that it wants to reduce its investments after the Constitutional Court’s ruling on the climate fund. In this regard, he told the German newspaper Handelsblatt: If Germany, as the largest economy, suffers economic or financial problems, this will affect other EU countries. It is therefore important that Germany maintains its national public investments.

Investment in East German chip factories, North German wind farms or the development of the hydrogen industry in Brussels They are seen as important strategic decisions for the entire EU.

Dombroskis said the federal government must now decide what implications the ruling will have on the budget – and Germany. How it wants to achieve its climate goals.

EU finance ministers want to decide on reforming debt rules by the end of the year. Governments should be allowed to reduce debt more flexibly in the future. Instead, they should become more reliable. European ministers will meet next Tuesday for a special meeting about this.

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