Construction costs are currently skyrocketing

2023-02-13 17:50:04

You always have to consider the context. When a car manufacturer voluntarily takes a summer break, that is something completely different from when the country’s Minister of Economic Affairs tried to explain on Maischberger that bakeries and others could temporarily stop operations due to high energy prices and then reopen at better raw material prices without being insolvent. And that was simply wrong. Because a planned factory summer break at VW is, of course, completely different to be assessed than the closure of a small medium-sized business which closes unplanned despite having ongoing costs such as rent/staff etc. If these costs continue, then the bakery’s balance sheet goes into the red and it becomes insolvent. Luckily, this drama did not happen. But the fact that Habeck doesn’t know that many entrepreneurs simply cannot pause their operations briefly because of liabilities (supplier contracts etc.) without falling into insolvency, since reserves have already been depleted by inflation/pandemic, is telling.

2023-02-13 18:50:56

You always have to consider the context. When a car manufacturer voluntarily takes a summer break, that is something completely different than when the country's Minister of Economic Affairs tried to explain on Maischberger that bakeries and others could temporarily halt operations due to high energy prices and then reopen at better raw material prices without being insolvent. And that was simply wrong. Because a planned factory summer break at VW is, of course, completely different to be assessed than a closure of a small to medium-sized company which closes unexpectedly, although it still has ongoing costs like rent/staff etc. If these costs continue, then the bakery's balance sheet goes into the red and it becomes insolvent. Fortunately, this dramatic scenario has not occurred. But that Habeck does not know that many entrepreneurs cannot just briefly stop operations due to liabilities (supplier contracts etc.) without falling into insolvency because reserves have already been depleted by inflation/pandemic is telling.

Seriously now? I thought by now it was sufficiently clarified how he meant it and that maybe not every word should be taken too literally. I don’t want to take sides for anyone here, but it is very telling when the same old stories keep being brought up again and again.

2023-02-13 19:07:58

You are insolvent (actually even literally) when you are no longer liquid (=unable to pay).
A baker or any other business that produces nothing but whose fixed costs are covered by the state is therefore not insolvent.
That is what Habeck meant, but he could not say it so concretely because the corresponding measures had not yet been finally agreed upon. In contrast to the agreement of the coalition partners not to talk about it until the concrete design was settled.
The claim that Habeck either has no idea about business administration or lied to Maischberger does not become truer by repeating it several months after the broadcast...
Note well: Assumption one could be true, but not based on the statement in the broadcast.

2023-02-13 19:16:32

The fixed costs were not taken over by the state at that time (September). The gas price brake was only available for one month in December. And between October and November, the baker could of course have gone bankrupt.

2023-02-13 19:30:40

Exactly, that's why he couldn't talk about it yet. At that time, these were all unlaid eggs. It could also have come to bridging funds like during Corona. At that time, nobody knew. The point is that Habeck's statement (or rather non-statement) is being used as an argument for his incapacity, although he simply couldn't be specific about what he meant due to agreements. It wasn't clear at that time that the protective shield would directly affect energy prices.

2023-02-13 19:38:15

Then Habeck simply shouldn't have said anything at all.

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Construction costs are currently skyrocketing

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