Germany wants to relax its insolvency laws to avoid an impending wave of bankruptcy, the German government announced on Saturday.
The corona crisis has also put many German companies in dire straits.
According to the plans of the German Ministry of Justice, companies with a high debt burden will be less strict.
The period within which companies can file for bankruptcy may also be extended.
An important condition for the relaxation is that the ailing companies have a solid business model.
The Merkel government previously announced a package of measures to support German companies.
For example, many companies are eligible for extra financial support or tax relief.
Germany is facing the biggest economic dip since World War II. In the second quarter, the largest economy in Europe shrank by 9.7 percent.