In April 2022 the war in Ukraine (for regular updates, cf. here, in German) was also dominating the economic headlines in Germany, while Corona slowly faded from the front pages. After the reality of the war and other factors hindering a swift ecomic upturn had seemingly set in with the German economy in March 2022 (here), the question is how it fared in April. So, let’s take a closer look:
The war of Russia against Ukraine dominates the headlines for over a month now (cf. here for the current situations update, in German). And while other nations and the largest parts of Europe had their respective “freedom day” a while ago, Germany was still fighting its own (unwinable) war against Corona – until the envisioned vaccination-obligation came crushingly down in the German parliament (as to the current German corona-status, cf. here, in German). The war as well as the (retarded) liberation from Corona will surely take a large toll on the German economy in the long run. In February (here), though, the German economy did not look too bad. But, hey, let’s take a look at immediate consequences, if any:
The change in jurisprudence of the German Federal Supreme Court (“Bundesgerichtshof“, “BGH“), may – after previous decisions regarding avoidance in insolvency that were initially difficult to interpret (here) – now actually turn into a true “dawn of a new era”: Germany’s highest civil court realignes areas such as avoidance law, the appointment of administrators and … more
After the Higher Regional Court (OLG) Frankfurt had already ruled in 2016 on the facts of the challenge of advisors’ fees in the case of a failed restructuring attempt (specifically “QCells“,see here for further details), the German Federal Supreme Court (“Bundesgerichtshof”, “BGH”) took more than five (5!) years to decide on the appeal. This fact alone is astonishing. Moreover, the decision, with its 49 pages, seems to be part of a growing series of decisions that are difficult to implement in practice (see earlier here). The following is an attempt at an initial assessment.
Although the case-numbers of people infected with corona were actually increasing in February (cf. here), this issue was put on a backburner even before Russian troups actually started their attack against the Ukraine on 24 February 2022. Hence, even if it was clear that there would be no “freedom day” as such, even Germany was opening up again. But then, Russia shocked the world. The consequences for the German economy are still not clear. So, hey, let’s take a look at the immediate pre-war status of the German economy:
The short-term outlook for 2022 was not look to bad at the end of last month, given the “hard KPIs” of orders, production and exports at the end of December 2021 (here). Also, the “end” of the pandemic indeed begins to materialise. However, rising inflation and a potentially escalating conflict in the Ukrainian might serve as a party crusher. But hey, let’s take a more detailed view on the January 2022 figures before jumping to conclusions:
The fiscal consequences of a contractual subordination have been subject of frequent discussion in recent years (see most recently here, in German). For example, German tax authorities often tried to probibit the recognition of liabilities (Passivierungsverbot) in the case of financially weak parties who had declared a subordination. The German Federal Fiscal Court (Bundesfinanzhof, BFH) has now put a bar to this approach:
On 12 January 2022, German the Federal Supreme Court (BGH) commented on the decision of the Higher Regional Court (OLG) of Dresden of 24 February 2021 on the Corona-related rent reduction, which I discussed here, and ruled that the more or less sweeping reduction by half opted for by the OLG Dresden in the case at issue was not permissible in this way. The BGH’s judgement is more differentiated. Reason enough to take a closer look at this decision, which is also important for companies’ liquidity planning.