Consolidation not liquidation

Abstract

More and more companies in Germany are running into economic difficulties. Whilst consolidation for small and medium-sized enterprises have been put in place in eastern Germany both by the national government and by the Länder (the federal states) — e.g. the consolidation fund and consolidation programmes introduced in the Länder to promote co-financing, there is in western Germany no immediately apparent sigh of a coherent basis for consolidation policy to set alongside the more traditional programmes geared to promoting economic development. This is all the more surprising in the light of the fact that it is much easier, as far as financial policy is concerned, to save existing jobs than to create new ones. On the other hand, an offensive policy of consolidation has to contend with very real regulatory obstacles, which tend to create a situation in which those wielding political power prefer to adopt a policy of covert consolidation. The regulatory models and paradigms in place in the various Länder vary considerably in the detail to which they have been elaborated (and this quite independently of the colour of the party in government). Consequently, there are similarly quite striking differences in respect of both the concrete content of consolidation policies and the manner in which they are presented to the outside world.