Barely two years ago, commentators were celebrating the German middle market as one that was stirring from a long slumber. Back in the heady days of 2000, tax reforms – including the zero-rating of capital gains tax, a reduction in corporate tax and a cut in the top rate of personal tax – in tandem with a new takeover code, were set to put the market into overdrive.

Unfortunately, the promised explosion of deals has turned out to be more of a damp squib. The tax reforms came into effect at the beginning of last year and already look in danger of being reversed if Germany's social democrats, architects of the zero-rating of capital gains tax, lose in September to their conservative rivals, the CDU.