November 20, 2008 (LPAC)--Two thirds of Mittelstand (small to medium-sized) firms in Germany, a Price Waterhouse Cooper poll found, now expect sinking profits for 2009, which is a significant shift of perception, because half a year ago, 54% still did not feel affected at all by the crisis. The situation has alerted several state-level governments of Germany, notably of Baden-Wuerttemberg and Bavaria, which are home to many firms in the automobile supplier sector and in machine-building.

In his meeting with managers of Bavarian car-makers yesterday, Bavaria's Governor Horst Seehofer called for a banking umbrella also for the Mittelstand to help overcome the latter's present acute liquidity problems. Seehofer said he thought of an increased role of the state banks here, like Kreditanstalt fuer Wiederaufbau, and the LfA Bank of Bavaria. Guenter Oettinger, Governor of Baden-Wuerttemberg, said on Tuesday that he sees a special role of LBBW, that state's bank.

The main problem here, though, is that since this is a world systemic crisis, insular financial initiatives will not help to really consolidate the Mittelstand and protect it from coming new turbulence. The aforementioned LBBW also lost at least 350 million euros in the Iceland speculative bubble.