Second wave of the crisis on its way

Just days after US commercial finance company CIT Group filed for bankruptcy Germany's Commerzbank has reported that it is having to boost its risk-management capital by several hundred millions of euros. The daily Süddeutsche Zeitung warns that a second wave of the crisis which spreads to industry and the service sector is imminent: "Clearly Commerzbank expects a profusion of insolvencies over the next few months. Other banks will follow its lead. By winter the credit crunch which some are still denying is likely to become fact. The consequences will be dramatic. Many medium-sized companies have been battling the crisis for a year now, and their capital resources have worn thin. … This year economic growth [in Germany] is expected to shrink by six percent. And the heavily indebted state no longer has the billions to rescue companies. The Germans have a long way to go before they emerge from the crisis, and the winter will be a hard one."

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