The German government intends to take steps at national level as well as taking action agreed within the European Union, announced Chancellor Angela Merkel following a meeting of what has become known as the Corona Cabinet. The new steps relate in particular to the production of personal protective equipment and masks.
The market for protective items is largely concentrated in Asia, and now we have been forced to learn that "we need a degree of sovereignty in this area, or at least a pillar of domestic manufacture". That could be in Germany, or elsewhere in Europe, explained Chancellor Angela Merkel.
To this end, long-term contracts should be concluded with companies, which will undertake to expand or re-launch the production of protective masks in Germany at short notice in return for price guarantees and guaranteed sales of certain volumes.
Another issue discussed by the Corona Cabinet is travel into Germany, reported Angela Merkel. What is now needed is to guarantee commuters the freedom to travel between their homes and their workplaces, while ensuring maximum health protection. To this end the federal and state governments will agree on common procedures.
A modification was also agreed to the existing Kreditanstalt für Wiederaufbau (KfW) loan programme. The aim of the new "KfW rapid loan 2020" is to support small and medium businesses in particular with swift liquidity assistance. Up to a ceiling of 800,000 euros. KfW loans totalling up to three months turnover will be awarded, with 100 per cent exemption from liability.
On Thursday, the Cabinet will meet again, in order to discuss the domestic manufacture of personal protective equipment. A task force is to be set up, which will be dedicated solely to national or Europe-wide production. The Federal Ministry for Economic Affairs and Energy is to be responsible.
With a view to tomorrow’s Euro Group meeting, the Chancellor declared that the European Union is facing "the greatest test since it was first founded", with all member states affected by the Corona pandemic. The ministers of finance have been asked for proposals on how to best address the challenges. Discussions are to look at the European Stability Mechanism (ESM), the European Treaties that make it possible to take special steps in the case of natural disaster, and the proposal of the European Commission for European short-time work allowance. "It will be a case of demonstrating that we are ready to defend and strengthen our Europe."
It is in Germany’s own interest for Europe to emerge strong from this test. Germany will only do well, if Europe does well, said the Chancellor. "That is why the only answer can be: more Europe, a strong Europe and a smoothly functioning Europe – in all member states."