spoke on the phone to Margrethe Vestager, Executive Vice-president of the European Commission, today. They discussed additional scope for granting state aid to companies affected by the coronavirus crisis. The European Commission had opened up opportunities for this on 19 March by putting in place a temporary special framework for state aid.
Said Minister Altmaier: “In the corona crisis, our companies are in need of swift aid without red tape. In adopting the new special framework, the European Commission has given us greater scope for state aid. We are using this scope. Today, I thanked Margrethe Vestager in person for the fact that the first three aid programmes have already been approved; I also discussed with her what additional steps need to be taken to prop up the economy in this current crisis.”
Based on the temporary special framework, the European Commission had quickly given the go-ahead for three proposals for state aid notified by Germany. These are:
- capped grants (small-scale aid)
- an expansion of KfW’s loan programmes, and
- a widening of the guarantee programmes.
Under the guarantee programmes, it is now possible for Germany to provide guarantees for up to 90% of the loan. Furthermore, the KfW Special Programme 2020, whose approval was fast-tracked by the European Commission, makes it possible to release banks from up to 90% of their liability for working capital loans made to small and medium-sized enterprises. Much lower interest rates (between 1 and 1.46% for SMEs, 2 to 2.1% for larger companies) and a streamlined risk-assessment for KfW loans of up to 3 million euros will considerably ease the burden on businesses.
On Monday, the Federal Cabinet also approved the creation of a an Economic Stabilisation Fund, which is to provide additional support to the real economy.