Factsheet for case DE-2020-13/352 – Updated – measures in Germany
|Country||Germany , applies nationwide|
|Time period||Temporary, 23 March 2020 – 31 December 2021|
|Type||Legislations or other statutory regulations|
Supporting businesses to stay afloat
– Access to finance
|Author||Sandra Vogel (IW)|
|Case created||07 April 2020 (updated 05 May 2021)|
The goal of this measure is to provide financial support to companies for investments and working capital. Improved conditions for receiving loans are based on the European Unions "Temporary Framework for State aid measures to support the economy in the current COVID-19 outbreak“. This measure is part of a broader rescue package for the German economy adpoted by the Federal Government at the end of March 2020. The package also includes changes in tax law, all of them directed at easing tax burdens for companies and also includes easier acces to loans, start-up support or financial help for solo- or micro entrepreneurs, eased up rules for short-time work and eased up rules regards insolvency proceedings.
The companies in need of financial assistance due to the negative impact of the COVID-19 outbreak can apply for loans worth up up to €1 billion. However, the loan sum is limited to one of the following critieria:
The loans must be paid back within a maximum of 10 years and the related interest rates were reduced (between 1 and 2.12% annually). To improve companies‘ chances to receive such a loan, the KfW bank (the German Credit Institute for Reconstruction) takes over the risks borne by the company’s house bank (80% of the risks for large companies and even 90% of the risks for SMEs). Companies that have been in the market for at least three, but not five years, or companies that can provide two financial statements can also apply for loans granting the same conditions. However, in this case, companies need to apply for the ERP Start Up Loan - Universal.
No information to date on this particular measure. However, the KfW issued a press release with the overall usage of the COVID-19 related measures administered by the bank. According to the press release, the KfW received over 70,000 loan applications (worth €50 billion) since 23 March 2020. 98.5% of these application were not higher than €3 million. In another press release from 6 November 2020, the bank stated to have received 95,000 applications for all its additional COVID-19 related programmes. 99% of the application had been finalised by the bank. Around 97% of the applicants were small and medium-sized companies. Granted sums amounted to a volume of nearly €46 billion.
|Does not apply to workers||
|Does not apply to citizens|
Company / Companies
Social partners' role in designing the measure and form of involvement:
|Trade unions||Employers' organisations|
|Form||Direct consultation outside a formal body||Direct consultation outside a formal body|
Social partners' role in the implementation, monitoring and assessment phase:
German social partners are usually consulted by the Federal Government on broader measures, though no formal tripartite social dialogue structure exsits in Germany at the federal level.
The Confederation of German Employers' Association (BDA) and the German Trade Union Confederation (DGB) jointly welcomed the crisis package adopted by the Federal Government in spring 2020. Social partners highlighted in the press release to be in support of the KfW administered measures targeting companies.
Eurofound (2020), KFW entrepreneur loan, case DE-2020-13/352 (measures in Germany), COVID-19 EU PolicyWatch, Dublin, http://eurofound.link/covid19eupolicywatch
Disclaimer: This information has not been subject to the full Eurofound evaluation, editorial and publication process. All information is preliminary and subject to change.