State aid from Austria, Belgium and Switzerland relieve the German taxpayer in the billion dollar rescue of Lufthansa. The Federal Ministry of Economics announced on Tuesday in Berlin that the federal government had approved financial aid from neighboring countries for the subsidiaries Swiss / Edelweiss, Austrian Airlines (AUA) and Brussels Airlines.
“The federal government expressly welcomes the commitment of the other countries.” The financial injections that have already been negotiated, with which the airlines are supported in the Corona crisis, needed approval from Berlin. The stabilization measures in Belgium, Austria and Switzerland would count towards the aid promised by the federal government, said Lufthansa. The neighbors shoulder around two of the total of nine billion euros with which Lufthansa is to be saved from collapse.
450 million euros for AUA
The nine billion euro package consists of 5.7 billion euros of silent participations, 300 million euros for the 20 percent stake of the German state and up to three billion euros in credit from the state credit institution for reconstruction. The KfW loan should now shrink. Because Switzerland gives a state guarantee for 85 percent of a bank loan in the amount of 1.5 billion francs to the Lufthansa subsidiaries Swiss and Edelweiss and thus stands for the equivalent of 1.2 billion euros.
The airline wanted to repay the money plus interest as soon as possible, explained Swiss. Switzerland gave the green light for the loans back in May. Most of the funds will come from the major banks UBS and Credit Suisse. Austria is helping AUA with a loan and a grant totaling 450 million euros. This plan was decided in early June. At the end of July, Belgium committed a EUR 290 million loan for Brussels Airlines 290.
The funds from Austria, Belgium and Switzerland may only be used by the respective national company. They do not flow into the Lufthansa Group’s pot. Lufthansa itself also supports AUA and Brussels. The shares of the MDax group rose by more than three percent. (apa, reuters)
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