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Around one in five German firms see themselves at risk of insolvency: survey

BERLIN (Reuters) - Almost one in five German companies sees itself at acute risk of insolvency due to the coronavirus crisis, a survey from the DIHK Chambers of Commerce showed, pointing to the heavy toll the coronavirus outbreak could take on Europe’s largest economy.

“That should set all the alarm bells ringing - if we don’t take decisive action, we’ll see economic damage of historic proportions,” DIHK President Eric Schweitzer said of the survey published on Friday.

The survey of 15,000 firms showed more than 80% of German companies expect revenues to decline significantly this year. More than a quarter of firms see revenues tumbling by at least 50% in 2020, creating problems with decreasing liquidity.

Germany is in virtual lockdown, with more than 42,000 infected and more than 250 dead. Parliament on Wednesday suspended the country’s constitutionally enshrined debt brake, approving a massive stimulus package worth more than 750 billion euros ($823.28 billion) to help weather the economic fallout.

“The number of affected companies has quickly risen from week to week due to the decreed restrictions on public life,” Schweitzer said. “Little of that help has arrived so far. It’s particularly tight for companies now at the end of the month.”

More than two-thirds of companies said they would need state subsidies to make ends meet.

The survey found that only 4% of companies expect to get through the year without a drop in revenues.

Some 43% of companies described a complete halt in their operations as their biggest problem.

Reporting by Michelle Martin, editing by Thomas Escritt