27 March 2020 – Introduced a fund to stabilise economic activity

Intervention Categories: Finance policy and financial aid; Stimulus packages and financial support
Level of Jurisdiction: National

Overview: The German Government launched a large-volume economic stabilisation fund with a value of up to 600 billion euros.

The fund is intended to cushion the economic impact of the pandemic on companies whose existence is of considerable importance for Germany as a business location or for the labour market. It is also intended to eliminate liquidity bottlenecks, support refinancing on the capital market and strengthen the capital base of companies.

The fund consists of 400 billion euro in government guarantees for liabilities, EUR 100 billion for direct state participation and EUR 100 billion for refinancing by the development bank KfW.

The fund’s support options also apply to systemically important smaller companies and companies in the critical infrastructure sector as well as start-ups that have been valued by private investors in at least one completed financing round since 1 January 2017 with an enterprise value of at least EUR 50 million, including the capital raised through this round.

The fund may also invest directly in companies for a limited period of time. The aim here is also to prevent a sell-off of German economic and industrial interests. This policy is modelled on SoFFin, the Special Fund for Financial Market Stabilization, which was established to respond to the global financial crisis.
Full details here: https://www.bmwi.de/Redaktion/DE/Dossier/coronavirus.html