Commission approves German fund to enable up to €500 billion for to enterprisesChristian Fernsby ▼ | July 10, 2020
The European Commission has approved German plans to set up a fund with a budget of up to €500 billion for providing guarantees and investing through debt and equity instruments in enterprises affected by the coronavirus outbreak.
Fund German factory
Germany notified to the Commission under the Temporary Framework a fund (‘Wirtschaftsstabilisierungsfonds') with a target size of up to €500 billion to provide liquidity and capital support to German enterprises affected by the coronavirus outbreak.
Under the scheme, the support will take the form of (I) guarantees (that are expected to mobilise €400 billion of the total amount), as well as (II) subsidised debt instruments in form of subordinated loans, and (III) recapitalisation instruments (in total up to €100 billion), in particular equity instruments (acquisition of newly issued ordinary and preferred shares or other forms of shareholding) and hybrid capital instruments (namely convertible bonds and silent participations). ■