BERLIN (Reuters) - Germany’s southern state of Bavaria on Monday announced a fund worth up to 10 billion euros ($11.21 billion) to help the region withstand the coronavirus outbreak, its premier said, declaring a state of emergency as the number of new cases rises.
The illness is spreading rapidly in Germany, prompting its federal government to temporarily introduce border controls on its frontiers with Austria, Switzerland, France, Luxembourg and Denmark.
“The situation is very serious and changing daily, unfortunately not for the better,” said Bavarian leader Markus Soeder. “We will not abandon anyone.”
The fund allows the Bavarian government to buy stakes in struggling companies to prevent insolvencies.
Bavaria is well placed to weather the economic impact of the coronavirus. The industrial southern region is home to nine blue-chip DAX-30 companies including carmaker BMW, engineering giant Siemens and sports retailer Adidas.
The fund allows companies with up to 250 employees to apply for loans of between 5,000 and 30,000 euros.
It will also be used to guarantee 80% of loans taken by companies threatened with defaults.
The German government said last week that the KfW state development bank has roughly half a trillion euros to help support Europe’s biggest economy, which risks being stricken by the epidemic.
The economy stagnated in the fourth quarter of last year and the coronavirus fallout has raised the risk that it will tip into recession in the first half of this year.
Reporting by Alexander Huebner; Writing by Joseph Nasr; Editing by Michelle Martin and Thomas Escritt