German Small Businesses Reflect Country's Strength

The following is an excerpt from an article in 

The New York Times
Tuesday, August 14, 2012

German Small Businesses Reflect Country's Strength

By JACK EWING

FRANKFURT — A growing number of Germans may want to see the euro zone dissolve, but Dagmar Bollin-Flade, owner of a small machinery company here, is not among them. Like many German businesspeople, she is keenly aware of the economic benefits of a common currency — and willing to pay a price to keep the euro intact.

“All those who say, ‘We want to get out of the euro’ — they don’t remember how it was,” Ms. Bollin-Flade said.

Her company, Christian Bollin Armaturenfabrik, belongs to the country’s vast swath of small and medium-size companies that are known as the Mittelstand and account for 60 percent of German jobs. Most feel no nostalgia for the days when they and their customers had to keep an eye on the value of a dozen European currencies, a time when the German mark sometimes became so strong that it threatened to price them out of foreign markets.

Amid loose talk about letting Greece leave the euro, or even reintroducing the mark, German business leaders are often the ones reminding the public what the economic consequences might be. Markus Kerber, president of the Federation of German Industry, last week called for more European integration and criticized what he said was “persistent political indecisiveness and disunity” that has undermined trust in the euro.

More than most, the Mittelstand has benefited from the euro, which has made it easier for small companies to behave like multinationals. Bollin, with about 30 employees in a small factory, sells its specialty shut-off valves to customers in China and around Europe.

So far, companies like Bollin have endured the euro zone debt crisis remarkably well. Ms. Bollin-Flade said she has not seen any effect on sales. But she and her peers are concerned about the future. In a poll commissioned this year by the industry federation, the number of Mittelstand companies that expected business to improve in the next 12 months slumped, while the number expecting a turn for the worse soared.

Ms. Bollin-Flade, who was one of about 10 businesspeople invited to discuss Mittelstand issues with Chancellor Angela Merkel in her office last year, said she supported the German leader’s strategy of insisting that financial aid be granted to troubled euro zone countries only if they show more fiscal discipline and economic reforms.

“We should get something in return,” Ms. Bollin-Flade said.

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