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EU approves two German state aid plans against coronavirus

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Via Yahoo Finance

BRUSSELS (Reuters) – The European Commission said on Sunday it had approved two state aid schemes to support the German economy amid the coronavirus epidemic.

The Commission, which is the guardian of EU rules and monitors to ensure that governments do not unfairly help companies for competitive advantage, said the first approved German state aid measure concerned a loan programme covering up to 90% of the risk for loans to companies of all sizes.

Eligible loans under that scheme may have a maturity of up to five years and can reach 1 billion euros per company, depending on the company’s liquidity needs.

The second approved measure is a loan programme in which the state owned bank KfW participates together with private banks to provide larger loans as a consortium.

For this scheme, the risk taken by the German government may cover up to 80% of a specific loan but not more than 50% of total debt of a company.

“The measures will allow the KfW to provide liquidity in the form of subsidised loans to companies affected by the Coronavirus outbreak. This happens in close cooperation with commercial banks,” the Commission said.

(Reporting by Jan Strupczewski; Editing by Catherine Evans)

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