‘A huge wave’: German state bank to give up to €100 billion in coronavirus loans

German state-owned investment bank KfW said Thursday it has requests for more than €10 billion in loans to fight the COVID-19 crisis, and could issue at least €50 billion.

'A huge wave': German state bank to give up to €100 billion in coronavirus loans
A sign in front of a TUI tourism office in Potsdam. Photo: DPA

 “A huge wave” of requests is likely to follow next week now the bank's IT systems are fully set up to deal with the lending scheme, KfW president Günther Bräunig said in an online press conference.

Some 2,500 requests have already arrived, and “at least €50 billion, maybe 100 billion” in loans are likely in the coming weeks, Bräunig said.

Over the whole of 2019, a comparatively normal year, the bank that specialises in development loans issued €77.3 billion of guaranteed credit.

So far 98 percent of the loan requests are for amounts below €3 million.

KfW has already approved 2,100 requests totalling €750 million.

The figure does not include a €1.8-billion-euro loan agreed by ministers for tour operator TUI, whose business has shut down owing to measures aimed at controlling the virus' spread.

Last month Berlin announced its biggest-ever post-World War II support programme for business in Europe's top economy, saying it would guarantee “unlimited” loans up to an initial threshold of €550 billion.

Companies will also be able to defer tax payments in the event of a financial emergency and do not have to pay any social contributions for the time being.

Instead, contributions to health, unemployment, pension and long-term care insurance can be deferred until May, with the possibility of an extension.

READ ALSO: Coronavirus in Germany: Who will receive financial help – and how much?

Up to 90 percent of the sums private banks lend to their clients will be guaranteed by the state via KfW.

But Berlin is at pains to make sure the coronavirus-related lending does not serve to prop up businesses that were already struggling before the crisis struck.

On Thursday, restaurant chain Vapiano declared insolvency after years on the brink, saying it had not sought a loan via KfW.

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Pandemic in Germany unlikely to end this year, says top virologist

High profile German virologist Christian Drosten believes Germany will see a severe spike in Covid infections after summer, and that the pandemic will not become endemic this year.

Pandemic in Germany unlikely to end this year, says top virologist

Drosten previously said that Germany would probably be able to declare the end of the pandemic this year.

But in an interview with Spiegel, Drosten said he had reevaluated his opinion. 

“When the Alpha variant came, it was very surprising for me. When Delta appeared I was sceptical at first, then with Omicron we had to reorient ourselves again. And since January there have already been new Omicron subtypes.

“So I would actually like to correct myself: I no longer believe that by the end of the year we will have the impression that the pandemic is over.”

READ ALSO: End is in sight for pandemic in Germany, says virologist 

Drosten also said that Germany will not see a largely Covid-free summer, which has been the case in previous years, and a further increase in infections in autumn. 

“We are actually already seeing an exponential increase in case numbers again,” Drosten said.

“The BA.5 variant (of Omicron) is simply very transmissible, and people are losing their transmission protection from the last vaccination at the same time.”

In other countries, he said, when the number of cases become high, hospitalisation and death rates also rise again. “Unfortunately, that will also be the case here,” said Drosten, but added: “Overall, however, far fewer people will become seriously ill and die than in 2021.”

Drosten said he expected many more infections from September.

“I hope that the school holidays will dampen the increase in cases somewhat. But from September, I fear we will have very high case numbers,” the head of the virology department at Berlin’s Charité hospital told Spiegel.

READ ALSO: German Health Minister lays out autumn Covid plan

Virologist Christian Drosten at a Covid press conference in 2021.

Virologist Christian Drosten at a Covid press conference in 2021. Photo: picture alliance/dpa | Kay Nietfeld

If the government does not take any action, he predicted there would be a lot of sick leave across all industries. “That will become a real problem,” he said.

Drosten said he did not expect overcrowded intensive care units in Germany.

But the new BA.5 sub-variant, which is becoming dominant in Germany, may affect people more strongly. 

“The wheel is turning more towards disease again,” said Drosten. It is not true that a virus automatically becomes more and more harmless in the course of evolution. “That makes me even more worried about the autumn,” he said.

Drosten recommends wearing masks indoors during the colder months, saying it is “the least painful” measure.

If, in addition, “up to 40 million people could be immunised or given a booster vaccination” before winter, for example by urgently calling for company vaccinations, that would “really make a difference”, Drosten said.

In the long term, he said it’s inevitable that people will become infected with coronavirus.

He said the population immunity due to vaccinations and infections will at some point be so strong that the virus will become less important. “Then we will be in an endemic state,” said Drosten. In the worst case, however, this could take “several more winters”.

However, Drosten warned against people trying to deliberately infect themselves with Covid, saying getting the infection in summer doesn’t mean people will be protected in winter. 

Drosten himself said he has not yet contracted Covid-19.

“So far, I guess I’ve just been lucky,” he said. “I rarely put myself in risky situations, but I’m not overly cautious either.”

‘Pandemic depends on behaviour’

According to the Robert Koch Institute (RKI)’s latest weekly report, more outbreaks are occurring in care homes, and the number of patients in intensive care units is slightly rising as infections go up. 

The institute said there had been a 23 percent increase in the 7-day incidence compared to the previous week. On Friday the 7-day incidence stood at 618.2 infections per 100,000 people. There were 108,190 infections within the latest 24 hour period and 90 deaths. 

“The further course of the pandemic depends not only on the occurrence of new virus variants and the uptake of vaccinations on offer, it also depends to a large extent on the behaviour of the population,” said the RKI.

According to the DIVI intensive care register, the number of Covid-19 patients in ICUs had increased to 810 on Thursday this week, from about 600 at the beginning of the month.

However, that number is still low compared to previous Covid peaks when thousands of people were in intensive care in Germany.