Germany's largest shipbuilders, Bremer Vulkan, won a stay of execution yesterday when creditors agreed to put up enough money to keep the company afloat for at least two months.
Jobst Wellensiek, the administrator appointed after the company filed for protection from creditors last week, met representatives of 40 banks in Bremen and persuaded them that parting with another DM100m was the only way of protecting their investment. But that is not going to be enough to save at least parts of Vulkan from bankruptcy. Some 23,000 jobs would be lost if the whole company were liquidated.
The company has about DM7bn worth of orders, but needs some DM2.5bn to stay in business. As the scale of its mismanagement in recent years becomes apparent, the prospects of receiving a large cash injection from the taxpayer are growing dimmer.
Gunter Rexrodt, the Economics Minister, met Vulkan's management, only to repeat the message he has been sending from Bonn in the past week.
"To put it clearly: We can send no money to Bremen," Mr Rexrodt had told a newspaper at the weekend, and that was the line he stuck to yesterday.
The government argues that, rather than holding out its hand, Vulkan's management should be returning money it has received from the state.
Accusations from the European Commission that the company stole EU subsidies destined for its shipyards in eastern Germany were amplified by the east German privatisation agency BVS. The BVS estimates Vulkan owes its eastern shipyards DM716m, the bulk of it structural funds from the EU. It is unlikely that sum, poured into Vulkan's other loss-making divisions, will ever be recovered. "The money is gone," commented Mr Wellensiek.
But the EU's Competition Commissioner, Karel Van Miert, has threatened to veto a refinancing package unless the EU funds are recovered. Mr Van Miert is also unhappy about Vulkan's accounting which he thinks was designed to hoodwink the creditors.
In an interview with the magazine Der Spiegel, he revealed that a preliminary audit of Vulkan's accounts exceeded his worst expectations. "I don't know any details yet. But from what I hear the findings are even more disastrous than we had feared," he said.