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EU Approves €46 billion Of Liquidity To Enterprises In Bavari

 |  August 20, 2020

The European Commission has approved German plans to set up a €46 billion (US$54.5 billion) fund at the level of the German State (Land) of Bavaria to provide guarantees and invest through debt and equity instruments in enterprises affected by the coronavirus outbreak in Bavaria. The scheme was approved under the State aid Temporary Framework.

Executive Vice-President Margrethe Vestager, in charge of competition policy, said, “This Bavarian fund will mobilise €46 billion of liquidity and capital support to help medium-sized enterprises that are particularly important for the real economy of Bavaria to weather the crisis. The measure ensures that the State is sufficiently remunerated for the risk taxpayers assume, and, as regards recapitalisation measures, that there are incentives for the State to exit as soon as possible, and that the support comes with adequate conditions, including a ban on dividends, bonus payments as well as further measures to limit distortions of competition. We continue to work closely with Member States to ensure that national support measures can be implemented as quickly and effectively as possible, in line with EU rules. ”

Germany notified the Commission under the Temporary Framework a fund (”BayernFonds”), with a target size of up to €46 billion, that will provide liquidity and capital support to enterprises that are important for the real economy in Bavaria and that were affected by the coronavirus outbreak.