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Good News for Investors
The current state of the global economy presents a number of challenges for businesses. Over the past year, financing investment projects has become more difficult as markets behave unpredictably. Germany has reacted to ensure its attractiveness as a business location and to create new opportunities for businesses.
Proven Ability to Cope with the Crisis
Germany remains Europe's most attractive business location, as the recently published Ernst & Young European Attractiveness Survey and a number of other studies demonstrate. In the Ernst & Young survey, Germany topped the rankings based on its ability to overcome the economic downturn. According to international decision makers, no other European country is as well prepared to tackle these challenges. This validates the government measures already taken to manage the current situation.
Economic Stimulus Packages
Two economic stimulus packages, worth nearly EUR 81 billion, have been pledged by the German government to help the economy overcome the downturn. Alone more than EUR 40 billion are aimed at relieving companies' constrained financial situations by providing additional public loans via Germany's promotional bank, the KfW Banking Group. Other measures focus on forward-looking industries, taxation, or infrastructure projects.
Easing Financial Adversity
In order to overcome the current liquidity squeeze within the banking sector, Germany has set up a Special Financial Market Stabilization Fund (Sonderfonds Finanzmarktstabilisierung, SoFFin) to facilitate lending. The fund has the ability to grant public guarantees worth a total of EUR 400 billion to banks. Additional financing to the tune of EUR 70 billion is provided for recapitalization and the assumption of risk positions. These measures aim to restore the overall confidence in the financial system and directly help companies at the same time.
