By Arnoud Boot, Elena Carletti, Hans-Helmut Kotz, Jan Krahnen, Loriana Pelizzon and Marti Subrahmanyam
Rescue programs of enormous proportions are currently being put together in the countries affected by the corona pandemic. We economists from Italy, the Netherlands, the United States and Germany are proposing the creation of a European fund that participates in Europe's small and medium-sized enterprises (SMEs) - thereby limiting corporate debt and creating a profit sharing scheme. The federal government's emergency program includes loans, credit guarantees and recapitalization aid amounting to 600 billion euros. Comparable programs exist in other European countries, but are significantly smaller. These relief campaigns aim at bridging payment defaults that companies of all sizes in Germany and other countries are currently experiencing due to the corona-related protective measures.
Originally published in German. Read the full article in Frankfurter Allgemeine Zeitung
Marti Subrahmanyam is the Charles E. Merrill Professor of Finance, Economics and International Business