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German economy minister faces criticism over insolvency comments

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German economy minister faces criticism over insolvency comments

Robert Habeck says some businesses “may stop selling” products if the going gets tough, but that it does not mean a wave of insolvencies.

Habeck, a leading member of the Greens political party, also says that some companies might have to close down if no measures are taken by the government.
Habeck, a leading member of the Greens political party, also says that some companies might have to close down if no measures are taken by the government.
(AFP Archive)

Germany’s Economy Minister Robert Habeck has come under heavy criticism over his comments on possible insolvencies due to an energy crisis and economic situation.

In a programme on the German broadcaster ARD TV on Tuesday evening, Habeck was asked whether he expected a wave of insolvencies at the end of this winter. 

“No, I do not. I can imagine that certain industries will simply stop producing for the time being,” he said.

Habeck cited flower shops, organic food shops and bakeries as examples, as these shops “depend on people spending money”. 

Such businesses would then have real problems because there would be a reluctance to buy. “Then they are not automatically insolvent, but they may stop selling,” Habeck said.

The presenter of the programme, Sandra Maischberger, asked the politician: “How do they not want to make a big loss if they pay people but no longer sell anything?”

Habeck, a leading member of the Greens political party, replied that companies might have to close down if no measures were taken by the government, adding that it does not mean a wave of insolvencies.

It remains unclear how companies are supposed to avert insolvency or over-indebtedness if they can no longer generate any income from their current business and receive no other help.

According to German law, anyone who does not file for bankruptcy despite being aware of insolvency or over-indebtedness is guilty of “delayed filing of insolvency” and liable to prosecution.

The Green politician’s statements drew sharp criticism from the opposition. “Unworldly, out of touch, haphazard. Economy Minister Habeck has no idea how to run a business, he stands for running a business down,” said Christian Social Union’s Secretary-General Martin Huber on Wednesday.

Huber wrote on Twitter: “And if too little electricity is produced in winter because the nuclear power plants need one week to start up, that’s not a blackout but the light simply stops shining a bit, or what? Habeck is going into intellectual insolvency.”

READ MORE:
Decision to keep atomic plants on standby reveals cracks in German govt


‘Weird statements’

Friedrich Merz, the leader of the main opposition Christian Democrats (CDU/CSU), reproached Habeck for his helplessness in answering questions about the crisis.

“One can only hope that a large part of the German small and medium-sized entrepreneurs and especially the bakers were already in bed and asleep at this hour and did not have to watch this,” said the CDU leader on Wednesday in the general debate on the budget in the German parliament Bundestag.

Meanwhile, the parliamentary director of the Left Party, Jan Korte, mocked Habeck on Twitter: “The Greens are NOT politically insolvent, they have just stopped doing politics.”

Korte’s party colleague Victor Perli also tweeted about Habeck’s “weird statements,” saying the federal government was giving “more and more the impression of losing track of the situation.”

READ MORE:
Russia ‘completely stops’ Nord Stream gas supplies to Germany
Source: AA


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