March 26, 2020 / 9:36 AM / 10 days ago

Germany eyes long-term profits from selling stakes it buys in crisis - paper

FILE PHOTO: German Finance Minister Olaf Scholz gives a speech during a session at the lower house of German parliament, Bundestag, on the outbreak of the coronavirus disease (COVID-19) in Berlin, Germany, March 25, 2020. REUTERS/Michele Tantussi/File Photo

BERLIN (Reuters) - Germany aims to make long-term financial gains from selling stakes in companies it acquires during the coronavirus crisis to ensure their survival, Finance Minister Olaf Scholz told the Rheinische Post daily on Thursday.

The pandemic is all but certain to tip Europe’s biggest economy into recession and Chancellor Angela Merkel’s government has announced measures to cushion the blow for workers and firms, including buying stakes in companies to protect them.

Scholz has made clear the state does not want to hang on to these holdings longer than necessary and will limit the acquisitions to the most extreme cases.

“When the situation has normalised we want to sell them again. We expect the economic revival to be so great that we will in part sell them making a profit so we can cover losses in other areas,” he told the paper.

“A second path is company bonds which funds can take over to support firms and businesses.”

The German lower house on Wednesday approved a massive stimulus package and suspended the country’s constitutionally enshrined debt brake to help fund it. The package includes 100 billion euros ($109.4 billion) for a fund that can take direct equity stakes in companies, and 100 billion euros in credit to public sector development bank KfW for loans to struggling businesses.

Reporting by Madeline Chambers; Editing by Andrew Cawthorne

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