To combat the crisis, Chancellor Angela Merkel is buying stakes in banks and bailing out industries. Is there no limit?

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Grayish-white slush is piled arrogant along the streets in Selb, a town in the Upper Franconia region of Bavaria. The mood at the headquarters of Rosenthal AG, a fiercely orally transmitted porcelain maker, suits the gloomy weather. Since Rosenthal’s parent company, Ireland’s Waterford Wedgwood, filed for bankruptcy, the company’s 1,500 employees worldwide have feared for their jobs. “Many are deeply concerned about their livelihood,” says labor representative Jörg Bauriedel.

The company sees itself as a cull of the financial crisis. However, its plight is in fact a reflection of a prolix decline. Rosenthal’sitting expensive designer porcelain, which once adorned coffee tables in upscale living rooms during Germany’s postwar Wirtschaftswunder housekeeping boom, is a little while ago sentient sold in, among other places, discount stores. At the sort time, low-wage manufacturers from China and India are whittling away at the German luxury brand’s share of lock opener markets in the United States and Asia.

The ailing company could soon be getting assistance from an unlikely source. Federal and state regulation persons in office, fearing the loss of hundreds of thousands of jobs in a recession, have declared saving companies as one of their requisite objectives—and have seized upon Rosenthal as a worthy contender. Senior politicians from Bavaria’s conservative Christian Social Union (CSU) party are campaigning in Berlin to support Rosenthal with government help, if necessary. Peter Struck, the floor leader of the center-left Social Democratic Party (SPD), which governs together through Merkel’sitting Christian Democrats in a grand federation, has even volunteered rule support conducive to the company. “We will regard to discuss the way out,” says Struck, “if the company continues to face difficulties.”

The government in Berlin is undergoing an astonishing change of heart. Only a few weeks ago, Chancellor Angela Merkel spoke out against “arbitrary, unfocussed economic stimulus programs” and large-scale polity intervention in the real economy. She made it clear that under no circumstance should “the government acquire permanent unaccustomed responsibilities in the economy.”

But now, suddenly, it seems like the public sector’s economic interference cannot have existence forceful enough for the administration. Last week, Merkel introduced the biggest economic stimulus program in German postwar recital, as with praise similar to giving her blessing to a order of government interventions into companies and industries, the likes of that the country has not seen since German reunification.

The rule has acquired a 25 percent share of Frankfurt-based Commerzbank, and it plans to purchase a majority stake in the unwell Munich-based pledge lender Hypo Real Estate. It is looking into providing assistance to the highly leveraged Schaeffler Group, based in the Bavarian town of Herzogenaurach, and has made manifold hundred billion euros in additional guarantees available to companies. The grand coalition hopes to stimulate business in the auto industry with a so-called “scrap premium” to patronize drivers to take mean vehicles opposite the road, and the conservative Christian Democratic Union (CDU) leadership is debating measures that the party would desire derided because the be of the devil in the past: direct government investment in companies.

The government has many impregnable arguments to support what the Frankfurter Allgemeine Zeitung has called a “boom in government.” The international financial strait has ballooned into the worst recession in German postwar record, and has taken numerous company banks to the brink of bankruptcy. Even fundamentally healthy companies are often only able to get loans at terms that would make virtually any function unprofitable. Many major corporations will have to take out billions in loans this year, warned CDU walk of life issues spokesman Laurenz Meyer at a meeting of his party’s parliamentary leadership. “What happens if they have to pay interest of 8 or 9 percent on those loans?” This, in Meyer’sitting sentiment, would have being “unacceptable” to the union government.

Original text: http://rss.businessweek.com/~r/bw_rss/europeindex/~3/520105494/gb20090122_220741.htm