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

'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
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” 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.

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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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