Holzmann future in doubt again

The government-backed rescue plan for Germany's second largest construction group, Philipp Holmann, has been called into doubt by the intervention of the EC competition commissioner.

Mario Monti has told the German government that "it is absolutely essential that no state aid is given before it is authorised - or if it is authorised."

Germany's Chancellor Schroeder had hammered out a deal with Holzmann's creditors that would see the government put up £125M, along with wage cuts for the company's 70,000 employees, in order to buy some time to sort out problems.

Holzmann, which operates in a highly competitive and over-supplied marketplace, got into trouble following, amongst other things, involvement in high risk property deals and loss-making FM services.

The EC wants to make sure that the proposed aid package falls into line with European competition criteria before it will agree to it.

Elliott Chase