7/8, 11:09 AM (Source: TeleTrader)
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EU backs German €500 billion fund for firms

The European Commission announced on Wednesday that it approved Germany's €500 billion fund which has the goal of helping companies that have encountered difficulties amid the coronavirus pandemic.

As much as €400 billion from the fund will come in the form of guarantees, while the rest will be available as subordinated loans and recapitalisation instruments such as equity instruments and hybrid capital instruments.

"The German fund aims to unlock €500 billion of liquidity and capital support. The scheme ensures that the State is sufficiently remunerated for the risk taxpayers assume, and, as regards recapitalisation measures, that there are incentives for the State to exit as soon as possible, and that the support comes with adequate conditions, including a ban on dividends, bonus payments as well as further measures to limit distortions of competition," European Commission Vice-President Margrethe Vestager said.

Breaking the News / VP