Germany mulls €100 billion in corporate loan guarantees
The German government is considering €100 billion ($135 billion) in guarantees to help companies find financing along the lines of a plan already used by banks, the Financial Times Deutschland reported on Wednesday.
State backing would help companies that faced problems in obtaining bank financing or issuing corporate bonds at reasonable rates, the paper said.
“We can't allow firms to go bankrupt because of the current difficulties,” a conservative member of Chancellor Angela Merkel's coalition told the paper.
The two options being considered by the government include providing the state development bank KfW with €100 billion via federal guarantees that could be loaned to companies in need and directly offering the loans from a government agency.
Berlin has already said it would guarantee up to €400 billion in loans by banks in a bid to unblock interbank lending markets, which are a crucial link in extending credit on which modern economies depend.