SHARE
COPY LINK

BUSINESS

German government to guarantee 100 percent of loans to smaller firms in coronavirus aid package

Germany will guarantee 100 percent of loans made by banks to small- and medium-sized firms, sources told AFP Monday, in an extension to the €1.1-trillion coronavirus crisis package in Europe's top economy.

German government to guarantee 100 percent of loans to smaller firms in coronavirus aid package
A cinema in Berlin with a sign that reads: 'we will be back'. Photo: DPA

The federal government will stand fully behind €500,000 ($540,000) of lending to companies with up to 50 employees and €800,000 for larger ones, upping its guarantee level from a previous 80 percent for large firms or 90 percent for smaller ones.

Berlin's economic aid so far totals over €1.1 trillion, the Finance Ministry said in an answer to an opposition parliamentary question seen by AFP Monday.

READ MORE:

Ministers have agreed a €600-billion “economic stabilisation fund” offering €400 billion of guarantees for companies' debts, 100 billion to lend directly to or buy stakes in troubled firms, and 100 billion euros to fund state investment bank KfW.

Meanwhile the amount of company borrowing KfW can guarantee has been boosted by €357 billion, for a total of €822 billion.

To keep their liquidity flowing, companies will also be able to delay tax payments.

The government says it will offer €50 billion of support for small and one-man-band companies, like photographers, musicians or carers.

Depending on the number of employees, individual companies will receive up to €15,000 each to keep the lights on over a period of three months.

Meanwhile freelancers applying for unemployment benefit will not be forced to seek new work.

Germany has also eased access to a programme that tops up workers' pay with government cash when their hours are slashed.

The scheme, known as Kurzarbeit, is widely credited with saving large numbers of jobs during the financial crisis of 2008-9.

Berlin expects more than two million people to work shorter hours in the coronavirus crisis, far outstripping the peak seen over a decade ago.

To cover the costs, the federal labour agency (BA) will start eating into its massive cash reserves of €26 billion.

With €156 billion in new borrowing to fund the payouts and extra health spending, the government has been forced to suspend a “debt brake” added to the constitution at the height of the financial crisis in 2009.

A further €82.2 billion of measures have been announced by Germany's federal states and municipal governments, as well as €63.2 billion in guarantees.

READ ALSO:

Member comments

Log in here to leave a comment.
Become a Member to leave a comment.

TRAVEL NEWS

Covid face mask rule on flights in Europe set to be eased

The mandatory EU-wide mask requirement for air travel is set to be dropped from Monday, May 16th, but airlines may still require passengers to wear masks on some or all flights

Covid face mask rule on flights in Europe set to be eased

Europe-wide facemask rules on flights are set to be ditched as early as next week in light of new recommendations from health and air safety experts.

The European Union Aviation Safety Agency (EASA) and European Centre for Disease Prevention and Control (ECDC) dropped recommendations for mandatory mask-wearing in airports and during flights in updated Covid-19 safety measures for travel issued on Wednesday, May 11th.

The new rules are expected to be rolled out from Monday, May 16th, but airlines may still continue to require the wearing of masks on some or all of flights. And the updated health safety measures still say that wearing a face mask remains one of the best ways to protect against the transmission of the virus.

The joint EASA/ECDC statement reminded travellers that masks may still be required on flights to destinations in certain countries that still require the wearing of masks on public transport and in transport hubs.

It also recommends that vulnerable passengers should continue to wear a face mask regardless of the rules, ideally an FFP2/N95/KN95 type mask which offers a higher level of protection than a standard surgical mask.

“From next week, face masks will no longer need to be mandatory in air travel in all cases, broadly aligning with the changing requirements of national authorities across Europe for public transport,” EASA executive director Patrick Ky said in the statement. 

“For passengers and air crews, this is a big step forward in the normalisation of air travel. Passengers should however behave responsibly and respect the choices of others around them. And a passenger who is coughing and sneezing should strongly consider wearing a face mask, for the reassurance of those seated nearby.”  

ECDC director Andrea Ammon added: “The development and continuous updates to the Aviation Health Safety Protocol in light of the ongoing Covid-19 pandemic have given travellers and aviation personnel better knowledge of the risks of transmission of SARS-CoV-2 and its variants. 

“While risks do remain, we have seen that non-pharmaceutical interventions and vaccines have allowed our lives to begin to return to normal. 

“While mandatory mask-wearing in all situations is no longer recommended, it is important to be mindful that together with physical distancing and good hand hygiene it is one of the best methods of reducing transmission. 

“The rules and requirements of departure and destination states should be respected and applied consistently, and travel operators should take care to inform passengers of any required measures in a timely manner.”

SHOW COMMENTS