German economy may return to pre-crisis levels in early 2022: Finance Minister By Reuters

German economy may return to pre-crisis levels in early 2022:


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© Reuters. FILE PHOTO: VW re-starts Europe’s largest car factory after coronavirus shutdown

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BERLIN (Reuters) – The latest economic data provide hope that Germany’s economy can return to pre-crisis levels in early 2022, Finance Minister Olaf Scholz said on Tuesday.

Germany’s rising level of government debt is not a problem because the country can tackle the situation with “good growth”, Scholz told TV station CNBC in an interview.

Scholz rejected concerns that state aid was artificially keeping alive companies that were in financial troubles in the wake of the crisis caused by the coronavirus pandemic.

Germany’s government has taken steps such as allowing firms to delay bankruptcy filings until the end of the year, extended from an original deadline of end-September.

Helped by these measures, the number of firms declaring insolvency in Germany fell 6% in the first half of 2020 compared with the year-earlier period.

Critics say suspending insolvencies delays but does not prevent the collapse of “zombie companies” that are artificially kept afloat.

Firms are making necessary decisions and adjustments despite the crisis, Scholz said. For instance, many companies are cutting staff at the moment instead of making use of state aid that would allow them to cut workers’ hours, he said.

“The debate about zombie companies is nonsense,” Scholz said.

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