By Andreas Kissler
BERLIN (Dow Jones) – The German Savings Banks and Giro Association (DSGV) has called for help for medium-sized companies in view of the current high energy price burden. “The sharp rise in gas and electricity prices is also bringing companies that are in a rock-solid position to their breaking point. If we want to jointly face the economic threat from Russia, then these companies need help,” said DSGV President Helmut Schleweis at the presentation of the S-Mittelstand-Fitnessindex, for which the balance sheets for 2021 of over 300,000 corporate customers of the Sparkassen-Finanzgruppe were evaluated.
Schleweis pointed out that public funding programs had proven to be very efficient tools during the Corona phase. Because of the large number of companies affected, a clear limitation of energy prices is now the most effective means of support. The most important task of economic policy is therefore to limit the electricity and gas prices and to ensure that the electricity price does not gallop with a political gas price. At the same time, Schleweis called for consistent energy savings in companies and private households. “If we want to protect our industrial base in Germany – and thus jobs – then companies and private households have to save at least 20 percent energy on average.”
Germany would undoubtedly face some very difficult years. “German companies are going into the forthcoming crisis on a solid and financially very robust footing,” emphasized the DSGV President. However, due to the war in Ukraine and the halt to gas deliveries from Russia, the German economy has had to make the transition to sustainability much faster than expected. “We all have strenuous years ahead of us, some of them full of deprivation. But we should be clear: For compelling reasons to protect the climate, we should all have reduced energy consumption anyway and switched to renewable energies,” he emphasized.
The challenge now is that this has to take place in a very short time and, above all, at the same time. At an online press conference, however, Schleweis was convinced that Germany could be in a better position in a few years than it was before the current crisis if this effort were successful. Schleweis attested that medium-sized companies make a significant contribution to Germany’s resilience to crises. Only with these companies can there be a successful energetic transformation. With an equity ratio averaging “still just under 40 percent”, the capital that is needed for the upcoming energy investments is available.
The interest rate turnaround by the European Central Bank will “only have an impact as a key factor in the cost structure of companies in the long term”. Over 80 percent of savings bank loans to companies and the self-employed are long-term loans with a term of more than five years. The earnings situation is primarily influenced by material prices and wage increases. For individual sectors, such as the capital-intensive real estate sector, rising interest rates “are a serious challenge,” said Schleweis. Based on current data, the DSGV President did not see any immediate threat of a wave of insolvencies. “There are currently no signs of a crisis in our early warning system, but they cannot be ruled out either,” he said.
Contact the author: [email protected]
DJG/ank/mgo
(END) Dow Jones Newswires
September 13, 2022 05:30 ET (09:30 GMT)