“For the German economy, the consequences of the sanctions and the war are clearly foreseeable and are already being felt in parts,” said the Vice Chancellor.
(Photo: dpa)
Berlin Federal Economics Minister Robert Habeck (Greens) has announced a loan program from the state development bank KfW. This is intended to support German companies that have to accept losses in their business with Russia, for example as a result of sanctions. With loans, companies could benefit from the state’s good interest rates, Habeck said on Thursday.
The program is scheduled to start soon, an exact date is not yet known. The program is based on the Corona loans from KfW, explained Habeck. According to information from the Handelsblatt, the federal government assumes that the EU Commission still has to approve the KfW support program.
The aim of the aid is to enable companies that have suffered damage from the Ukraine war to develop new business areas. Habeck’s announcement was preceded by a discussion with top representatives of the German economy.
According to participants, the support should also be aimed at companies that are not directly affected by sanctions against Russia, but are suffering directly from the war in Ukraine or whose supply chains have collapsed due to the conflict.
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Habeck initially did not name a volume of the program. The plans have not yet been finally agreed in the government.
The Ministry of Economics estimates the investments of German companies in Russia at 20 billion euros. Of this, 7.4 billion euros would be guaranteed directly by the state. It is possible that the state has taken on further guarantees which, based on the risk calculation, are not considered direct state guarantees. According to Habeck, a total of ten to 15 billion euros should not be secured.
In addition to the direct state guarantees of 7.4 billion euros, there are Hermes guarantees amounting to eleven billion euros. Overall, there are default risks for the state of around 20 billion euros, said Habeck.
The state is not obliged to support companies suffering from sanctions. The chances of German companies being legally compensated for economic losses due to the sanctions are slim. In principle, companies bear the risks of foreign business themselves.
According to Habeck, the hope so far has been to see a stronger upswing in Germany from the second quarter. “Now the effects of the war are added.” All companies would fully support the sanctions against Russia. However, there will only be a recession in Germany if production comes to a standstill.
Energy embargo would endanger “social peace”.
Habeck explained that there was no reason to fear any further burdens on companies as a result of a European embargo on Russian energy. Because stopping oil, gas and coal imports from Russia would endanger social peace in Germany. “I would not support an embargo on Russian fossil fuel imports. I would even speak out against it.”
Germany is currently still dependent on imports – even if efforts are being made to change this as quickly as possible. That is why the federal government will keep open the possibility of energy supplies from Russia. “We need these energy supplies to create price stability and energy security in Germany,” said Habeck.
More: These would be the consequences of a complete departure from Russia as an economic partner