GE GVT Economic Stabilization Fund

On Mar. 23, GE GVT issued federal aid for companies re Covid.

  • Follows GE GVT, Mar. 2020, supplementary budget 2020 approval, see #74414.
  • Stabilization Fund
  • GVT has activated an economic stabilization fund to support economy and secure jobs.
  • In addition to KfW loan program already approved, fund enables large-scale aid with government guarantees/potential for government to take a temporary stake in firms.
  • Fund Instruments
  • Guaranteed €400bn to support firms in refinancing themselves on the capital market.
  • Recapitalization measures of €100bn to strengthen capital/ensure company solvency.
  • Also includes loans of up to €100bn, to refinance the existing KfW special programs.
  • Companies must meet specific criteria to qualify: total assets of more than €43 million; sales revenues of more than €50 million; annual average of more than 249 employees.
  • In order to give as many companies as possible access, the group of beneficiaries has been expanded and goes beyond EC definition for small and medium-sized companies.
  • The economic stabilization fund instruments are initially limited to the end of 2021.
  • Activation Measures
  • The federal government will raise additional funds on the capital market as required, and use its established and reliable market access through German Finance Agency.
  • Recapitalization measures can be linked to specific conditions, which can affect amount of organ remuneration, the distribution of dividends funds made available by the state.
  • In order for the measures to be effective and for companies to be helped quickly and without additional red tape, some corporate law provisions have also been adapted.

Regulators GE GVT
Entity Types Bank; Corp
Reference PR No 6 3/23/2020; COVID-19
Functions BCS; Financial; Resolution; Risk; Treasury
Countries Germany
Products Banking; Corporate; Loan; Securities
Regions EMEA
Rule Type Guidance
Rule Date 3/23/2020
Effective Date 3/23/2020
Rule Id 74411
Linked to Rule :74414
Reg. Last Update 3/23/2020
Report Section EU

Last substantive update on 03/25/2020