Germany Plans $68 Billion Loan Guarantees for Energy Firms

Germany is set to use a fund created to help companies cope with the economic hit from the pandemic to provide loan guarantees for struggling energy firms, Reuters reported. State development bank KfW would oversee the mechanism and the volume of loan guarantees available would be around 67 billion euros ($67.9 billion). Chancellor Olaf Scholz’s government is set to approve the plan -- which is designed to help energy companies forced to pay higher prices due to Russian supply cuts -- at a regular cabinet meeting on Wednesday. Europe’s largest economy is at the center of the continent’s energy crunch as Russia slashes supplies in retaliation for sanctions imposed over its invasion of Ukraine. Concerns have been mounting that Germany could face a wave of bankruptcies in the fallout from the crisis. Separately, Scholz said on Tuesday that Germany would implement a power price cap quickly to help consumers and companies cope with soaring electricity costs. “We will now push this through with great speed, so that we can relieve the burden on consumers as well as on companies when it comes to electricity prices,” Scholz said in Berlin. Read more.