GERMANY TO GUARANTEE 100% LOANS TO SMALLER FIRMS

Berlin, April 6: Berlin will guarantee 100 per cent of loans made by banks to small- and medium-sized firms, in an extension to the 1.1trillion-euro coronavirus crisis package in Europe's top economy, German government sources told AFP on Monday.

The federal government will stand fully behind 500,000 euros

($540,000) of lending to companies with up to 50 employees and 800,000 euros for larger ones, upping its guarantee level from a previous 80 per cent for large firms or 90 per cent for smaller ones.

Berlin's economic aid so far totals over 1.1 trillion euros, the finance ministry said in an answer to an opposition parliamentary question seen by AFP Monday.

Ministers have agreed a 600-billion-euro "economic stabilisation fund" offering 400 billion euros of guarantees for companies' debts, 100 billion to lend directly to or buy stakes in troubled firms, and

100 billion euros to fund state investment bank KfW.

Meanwhile the amount of company borrowing KfW can guarantee has been boosted by 357 billion euros, for a total of 822 billion.

To keep their liquidity flowing, companies will also be able to delay tax payments.

Berlin says it will offer 50 billion euros of support for small and one-man-band companies, like photographers, musicians or carers.

Depending on the number of employees, individual companies will receive up to 15,000 euros each to keep the lights on over a period of three months.

Freelancers applying for unemployment benefit will not be forced to seek new work.