Corona crisis: Federal government sets up a rescue package for companies and banks

Corona crisis: Federal government sets up a rescue package for companies and banks

According to SPIEGEL information, the federal government wants to set up an extensive rescue package for companies that are in need because of the corona epidemic. The fund will contain a volume of around EUR 500 billion. He is said to save companies from bankruptcy by issuing guarantees for their liabilities or actually funding capital, which would amount to partial nationalization. The model for the new instrument is the Special Fund for Financial Market Stabilization (Soffin), with which the state saved banks from the imbalance during the financial crisis twelve years ago. At that time it was endowed with 480 billion euros, the majority of which were guarantees. The new construction should also work primarily with guarantees that initially do not cost the state budget. But he can also take on new debts himself. In the event that banks are again in need in the current crisis, the federal government also wants to revive Soffin.

In the Federal Ministry of Finance (BMF), headed by Olaf Scholz (SPD), state aid and support programs amounting to up to five percent of gross domestic product (GDP) are being considered. That would be around 180 billion euros in absolute terms, for which the federal government would have to borrow. According to officials in the Ministry of Finance, it would be no problem to increase aid to the sum of 700 billion. “We are thinking about orders of magnitude that have never existed before,” SPIEGEL quotes a BMF official. The debt ratio would then be 80 percent, as after the last crisis.

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