Germany extends pandemic aid fund by half a year

The German parliament has approved an extension of the multi-billion coronavirus aid fund for larger companies, reported dpa.

The Economic Stabilization Fund (WSF) was previously set to expire at the end of 2021 and will now run until June 30, 2022.

Germany's coalition partners - the Social Democrats (SPD), Greens and FDP - as well as the opposition Christian Democrats, all backed the extension. The far-right Alternative for Germany and hard-left Linke party abstained. The extension will now go the upper house for final approval.

The fund, set up shortly after the outbreak of the pandemic in spring 2020, seeks to stabilize companies that encounter liquidity problems and whose failure as a going concern would have a "significant impact" on the economy and the labour market. Airline Lufthansa received billions in aid, for example.

In addition to the WSF, there is further aid to help the economy in the pandemic, with schemes for bridging aid and short-time work also being extended.

In concrete terms, the volume of possible aid will be reduced. For example, recapitalization measures, which can go as far as direct state involvement in a company and for which the WSF is allowed to take out loans, have so far had an upper limit of 100 billion euros (113 billion dollars) in total. This sum will be reduced to 50 billion euros.

So far, according to the government, funds amounting to about 8.8 billion euros have been spent on recapitalization.