‘Germany could take further public stakes in companies’
Germany will take further stakes in companies threatened by the coronavirus crisis, Economy Minister Peter Altmaier said, adding that "probably a few dozen" firms might follow airline group Lufthansa in passing into partial state ownership.
Shareholders backed a 9 billion euro government bailout last month, securing the future of Germany's flagship carrier after it was brought to the brink of collapse by the travel slump caused by the pandemic.
In an interview with Saturday's Frankfurter Allgemeine newspaper, Altmaier said: "We're talking about perhaps a few dozen cases. In these very limited number of cases we will use the possibilities offered by the economic stabilisation fund, including taking a stake where appropriate."
It was also possible that the state would buy into other strategically important companies, like vaccine maker CureVac, in that case fending off an attempt by the United States government to buy it. "I've always made it clear that state stakes must be an absolute exception," he added. On the airline group, which this week announced plans to cut 20% of its leadership positions and 1,000 administrative jobs, Altmaier said the government would not stand in the way of lay-offs. Turning to another major company in which Germany holds a large stake, Altmaier said a decision on the 15% stake in Commerzbank it took to ward off its collapse during the financial crisis would be made next year.
New Jersey, one of the states hardest hit by the coronavirus outbreak, would borrow up to $9.9 billion from sources that could include the U.S. Federal Reserve to deal with massive revenue losses from the economic shutdown, under an agreement announced on Friday between the governor and legislative leaders.
At a media briefing, Democratic Governor Phil Murphy said the state "is out of money" and that it needs the borrowing as well as an influx of federal dollars due to a budget shortfall through 2021 that he cautioned could reach $20 billion.
"Everybody recognizes the need for the borrowing, as painful as it is," he said. "We know we don't have a choice even with federal cash." The Fed's municipal liquidity facility is an option for a significant portion of the borrowing, according to Murphy's office. Illinois became the first state to tap the program with a $1.2 billion, one-year loan last month.
New Jersey Senate President Steve Sweeney, a Democrat, said the borrowing would address the financial crisis caused by the virus and would be overseen by a new legislative commission. A borrowing bill is expected to be taken up by the Senate next week and then move to the Assembly for a vote. States, including New Jersey, have been pushing the U.S. Congress for unrestricted funding they could use to plug big budget holes caused by plummeting tax revenue.
To deal with its crisis, New Jersey extended the end date for its fiscal 2020 budget by three months to Sept. 30, 2020. Fitch Ratings in April downgraded New Jersey's credit rating one notch to A-minus with a negative outlook, citing "significantly weakened finances." New Jersey has had 176,575 cases of the coronavirus, according to a Reuters tally, the fifthhighest of any U.S. state.