Yesterday, Der Spiegel stated that Germany plans to establish a half-trillion-euro fund to support companies facing difficulties in payments due to the Corona virus crisis, as it will be able to guarantee commitments or pump capital when necessary.
The fund of approximately 500 billion euros (538.05 billion dollars) will be similar to a special market stability fund of 480 billion euros that was established by the government to support banks at the time of the financial crisis. "Der Spiegel" said that the government is ready to revive that fund also if the banks face difficulties.
She pointed out that the Ministry of Finance is currently considering launching special support programs worth approximately 180 billion euros, adding that there is a possibility to increase the amount to 700 billion euros.
It quoted a finance official as saying: "We are simply studying values that were not previously found." The Ministry of Finance was not immediately available for comment.
The President of the German "Ifo" Institute, Clemens Faust, had announced the day before yesterday, that the German economy may shrink by up to 6% this year in light of the Corona virus crisis.
"The course of events depends very much on the developments of the epidemic," Faustus said.
He added: "We are studying two perceptions today: a very favorable scenario that will result in negative economic growth of 1.5% in 2020," noting that this is based on limited production cuts.
He continued, "We have a second scenario in which production restrictions are significant, and this will lead to a 6% economic contraction in 2020."
Finally, German Minister of Economy Peter Altmire predicted that his country’s economy, the largest in Europe, would sooner or later return to normal after the Corona virus crisis.
"We all expect that, sooner or later, economic activity will return to normal, and the economy will resume its successful course," Altmire said.
- The government is ready to revive another 480 billion euro fund if banks encounter difficulties.