Federal Government adopts economic policy shock absorber
Federal Minister for Economic Affairs and Climate Action Robert Habeck and Federal Finance Minister Christian Lindner have announced an interim package of measures for German businesses. It is targeted at companies that have been particularly affected by sanctions or the consequences of the war in Ukraine. The package is intended to mitigate hardships and prevent sudden structural changes. However, according to Federal Finance Minister Lindner, it will not override market forces. When presenting the package, Lindner also stressed that the package is mindful of the need to use taxpayers’ money responsibly.
Minister for Economic Affairs Habeck added that this was a targeted and comprehensive package that was designed to prevent creating undesirable incentives. However, he also stressed that comprehensive did not mean that every shock could be prevented.
The main components of the package of measures are liquidity assistance and complementary precautionary measures.
- A KfW loan programme to ensure that companies have sufficient liquidity in the short term.
- Continuing individual measures that were put in place during the coronavirus pandemic to expand the Federation-Länder guarantee programmes. These are the guarantee banks and the large-scale guarantee programme.
Additional precautionary measures:
- Temporary and tightly limited subsidies to provide short-term mitigation for the effects of the increased prices of gas and electricity.
- A funding programme for businesses that have been put at risk due to high margining.
- Targeted equity and hybrid capital support.