German Chancellor Olaf Scholz’s party, the largest in the Bundestag, wants to temporarily suspend the requirement for businesses to file for insolvency, as upcoming winter and rising energy costs wreak havoc on both household and business budgets.
“It seems to me that temporary changes in insolvency law are urgently needed for us to get through the crisis together and preserve jobs,” SPD parliamentary group leader Dirk Wiese told the Rheinische Post in Düsseldorf.
Wiese says some businesses in Germany will already be feeling the crunch of rising costs, while still not being able to access any of the federal government’s relief programs.
The German Bundestag has passed around €100 billion in inflation relief packages in total, with the last one totalling €65 million. However, much of the money – including the promised one-off €300 energy payment or the €300 to pensioners – still hasn’t actually been paid out yet.
The SPD says it’s not fair for companies to have to declare insolvency now due to biting costs if government aid later could eventually help them stay afloat. That matters because some relief measures are not available to businesses that have already declared bankruptcy.
“We have to take responsibility here and give these companies a helping hand,” says Wiese.
A recent survey found that about 83 percent of Germans expect there to be job losses this winter due to rising costs and failing businesses.
The SPD parliamentary group has requested that Energy and Economy Minister Robert Habeck, Scholz’s Green Vice-Chancellor, put a proposed law together for suspending bankruptcy filings. They say they’re still waiting for a response from Habeck’s office.