Olaf Scholz: The story about German 'zombie companies' is nonsensical

(Patria) – The latest economic data indicate that the German economy could return to pre-pandemic levels by the beginning of 2022, stated German Finance Minister Olaf Scholz.

In an interview with TV CNBC, he explained that rising public debt is not a problem because it can be resolved with 'good economic growth'.

Scholz resolutely rejected speculation that German companies facing financial difficulties due to the pandemic are being artificially kept afloat by state aid.

Let us recall that the German government has adopted a set of crisis measures allowing companies that intended to declare bankruptcy to postpone it until the end of the year, extending the previous deadline of September 30.

As a result, the number of companies intending to go bankrupt fell by 6% in the first half of the year compared to the same period last year.

However, critics argue that postponing bankruptcy does not prevent the collapse of 'zombie companies' that are artificially sustained.

- Companies are making necessary decisions and adapting despite the crisis, explained Scholz, adding that many companies are reducing staff 'instead of using state aid based on which they could shorten employees' working hours'.

He emphasized that the story about zombie companies is 'nonsensical'.