Most of German businesses are part of the so called “German Mittelstand”, i.e. qualify as privately and family owned small or medium sized enterprises. To protect these enterprises from the effects of the ongoing COVID-19 pandemic, the German Federal Government has already established several measurements, in particular such to provide companies with liquidity. In this context, the German Federal Government, together with KfW, a German state-owned development bank, established special programs intended to provide companies with easier access to loans for investments, operating equipment, etc. by assuming up to 90% of the risk for small and medium sized enterprises. However, only a few weeks into these programs, many enterprises complained that their house banks were unable or unwilling to take the remaining risk.

Continue Reading Further Protection Measures for the German Mittelstand

On Thursday, the European Central Bank (ECB) announced a EUR 750 billion “Pandemic Emergency Purchase Program (PEPP)” to help combat the economic consequences of the coronavirus crisis.

PEPP is a new bond purchase program for all categories of securities already eligible in the existing asset purchase program (APP) of the ECB. The program will include a new temporary purchase of public and private sector securities to counter the risks to the monetary policy transmission mechanism and the outlook for the euro area. In addition a waiver of the requirements for purchasing securities issued by the Greek government will be granted for purchases under PEPP.


Continue Reading ECB resolved on Pandemic Emergency Purchase Program (PEPP)

On Monday, 16 March 2020, the German Federal Ministry of Justice and Consumer Protection (Bundesministerium der Justiz und für Verbraucherschutz) announced that they are working on a legislative provision according to which the obligation to file for insolvency within three weeks following the occurrence of a reason for insolvency (i.e. illiquidity or over-indebtedness) would be suspended for such entities which face liquidity issues due to the Corona (COVID-19) pandemic.

Continue Reading German Federal Ministry of Justice and Consumer Protection Announced Suspension of the Obligation to File for Insolvency