The German government on Friday unleashed the biggest economic aid package in the country’s post-World War II history, offering companies “unlimited” credit to keep them afloat during the COVID-19 crisis.
German Chancellor Angela Merkel said the measures “are unprecedented in the history of the German government,” and repeated that Berlin would do “whatever is necessary” to tackle the fallout from the pandemic.
German Minister of Finance Olaf Scholz described the rescue measures as the equivalent of bringing “a bazooka” to the economic fightback against the virus.
“There is no upper limit to the credit offered by [state-owned development bank] KfW, that’s the most important message,” said Scholz as he unveiled the measures.
About 550 billion euros (US$614 billion) in government-backed loans that was announced is just “for starters,” German Minister of Economy Peter Altmaier told the news conference.
“We promised that we will not fail because of a lack of money and political will. This means that no healthy company, no job should find themselves in trouble,” he said.
“We will reload our weapons if necessary,” Altmaier added.
The ministers also signaled that Berlin has enough funds in its treasury for a long battle.
“If it lasts longer, we can go on longer,” Scholz said.
The message to companies is that: “You can be courageous, the risks will be carried by us,” he said.
The package, even in its first stage, is bigger than the 500 billion-euro help offered by the German government during the 2008 financial crisis.
Merkel had on Wednesday vowed to do what it takes to tame the crisis, signaling that she was even ready to suspend the cherished dogma of keeping Germany’s budget balanced.
Germany has recorded over 3,600 cases of the coronavirus and eight people have died.
As concern grows, Germany’s regional states have one by one announced that schools, daycare centers and kindergartens would be closed from tomorrow.
Among them were Germany’s most populous state of North Rhine-Westphalia, home to about 18 million people, as well Bavaria, Baden-Wuerttemberg, Hesse and Berlin.
Merkel urged Germans to “show solidarity by keeping their distance from each other” to protect the elderly and the most vulnerable.
Merkel’s government has in the past few days ramped up its response to fight not only the virus, but also the effects of the contagion.
With demand from abroad collapsing, Europe’s biggest economy’s vital export industries are particularly vulnerable.
Germany is rushing through new regulations to allow more employees forced into shorter working hours to qualify for compensation.
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