Eurofound's EU PolicyWatch collates information on the responses of government and social partners to the COVID-19 crisis, the war in Ukraine, rising inflation, as well as gathering examples of company practices aimed at mitigating the social and economic impacts.
Factsheet for measure DE-2020-14/388 – Updated – measures in Germany
|Country||Germany , applies nationwide|
|Time period||Temporary, 01 April 2020 – 30 June 2021|
|Type||Legislations or other statutory regulations|
Supporting businesses to stay afloat
– Access to finance
|Author||Sandra Vogel (IW) and Eurofound|
|Measure added||08 April 2020 (updated 31 May 2022)|
The Federal Government makes additional funds available to support the start-up scene and enable them to keep their employees and continue to work on their ideas. The measure is part of the Federal Government's assistance package adopted to cushion the effects of the crisis. The rescue package also includes other changes (for the whole of the economy), such as easing tax burdens for companies improved access to loans or financial help for solo- or micro entrepreneurs.
The Federal Government set up a fund entirely dedicated to start-ups that usually face greater difficulties in securing finances by traditional credit instruments. The start-up booster fund is worth €2 billion and seeks to expand venture capital financing. The government hopes that funding rounds for innovative start-ups will continue and start-ups will remain able to develop their ideas. Therefore, additional public funding will be made available for usage by public venture capital investors, such as the KfW Capital, the High-Tech Gründerfonds or the European Investment Fund. The general idea is that public venture capital investors will use the additional funds to fill-in for other investors that might pull out during the crisis. Small business and start-ups will also be able to profit form venture capital financing and equity replacement financing, if they do not have venture capitalists as shareholders.
The Federal Government released information on the usage of additional funds granted for start-ups on 18 November 2020: Until 6 November 2020, the KfW Capital and the European Investment Fund received 79 applications worth €1.17 billion. Out of these, 31 applications worth €756.4 million had been granted by 6 November 2020.
At the beginning of February 2021, the KfW announced that it had granted €871 million in funds in 2020 as part of COVID-19 related measures to support start-ups.
As of 9 September 2021, €1.56 billion had been granted to support start-ups during the COVID-19 pandemic.
|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 exits in Germany at the federal level. This particular measure was also introduced taking up proposals by the Federal German Start-up Association.
The Federal German Start-up Association welcomed the new measure after its initiation but also highlighted that a speedy implementation was needed to help start-ups survive.
Eurofound (2020), Customised support for start-ups, measure DE-2020-14/388 (measures in Germany), EU PolicyWatch, Dublin, https://static.eurofound.europa.eu/covid19db/cases/DE-2020-14_388.html
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Disclaimer: This information has not been subject to the full Eurofound evaluation, editorial and publication process.