23,000 Holzmann jobs on the line

HOLZMANN, the construction firm that German Chancellor Gerhard Schroder controversially saved from bankruptcy nearly three years ago, is near to collapse.

Bankruptcy proceedings were starting today with 23,000 jobs in jeopardy - a catastrophe for the Chancellor, who is campaigning for a second term of office on a pro-employment platform. Holzmann now looks like being Germany's biggest corporate failure, the victim of a seven-year construction recession.

Schroder earned the wrath of the European Union by stepping into save 5,000 jobs there shortly before Christmas 1999. He said at the time: 'I believe the Holzmann company has a bright and profitable future.'

However, it lost nearly £150m last year and £50m the year before. Just over two years after the biggest corporate bailout in German history and with the billions that it took to stay afloat squandered, a rescue package was rejected yesterday and a second one today also failed.

Holzmann's declining fortunes come in a week of financial turmoil in Germany, with Deutsche Telekom slashing its dividend in an effort to restructure debt and the limping Kirch media empire abandoning the merger of its broadcasting and film rights units and saying thousands of jobs will go at its pay-TV venture.