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Corona pandemic: Lufthansa asks for state aid

Dhe Lufthansa is exploring the chance of government support because of the immense consequences of the corona virus. “We are talking to the governments of the home markets about possible state aid,” said a company spokesman on Friday. In addition to the German government, talks are underway with the governments of Austria, Belgium and Switzerland, in which the group is represented with its subsidiaries Austrian, Brussels and Swiss.

In addition, Lufthansa boss Carsten Spohr apparently takes part in a round with Chancellor Angela Merkel (CDU), which should deal with the new corona virus and its consequences, for example for the economy. The Lufthansa Group canceled a large part of the flight offer for the coming weeks due to the immense drop in demand and entry bans.

According to a report by the “Handelsblatt”, the Lufthansa Board of Management is currently even going through scenarios of largely stopping flight operations for a while. But nothing has been decided yet. “The situation is extremely dynamic at the moment,” the newspaper quotes a source from the company’s environment. The group spokesman did not want to comment on this presentation.

Lufthansa share prices rose significantly at the end of the week. The shares in the largest German airline increased in the course of trade by up to 20 percent. The German stock market also stabilized somewhat after the dramatic price losses in the past few days. The Dax tended to be more than 6 percent firmer during the day.

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The German government had previously announced extensive aid measures for German companies. These include, for example, tax deferrals and unlimited aid loans. The Euro Stoxx 50 stabilized almost 5 percent in plus. The previous day, the leading index of the eurozone experienced a historic decline in price with a loss of more than 12 percent. On a weekly basis, there is currently a drop of more than 17 percent.

The most recent crash was triggered by a US entry ban for most Europeans to curb the novel corona virus. Even an emergency package put together by the European Central Bank (ECB) against the economic consequences of the coronavirus pandemic could not prevent the crash. At around noon on Friday, the ECB announced that it could do more if necessary, such as bringing bonds forward or concentrating on some countries.

In Milan and Madrid, where the leading indices tumbled down 17 and 14 percent on Thursday, on Friday there were high price gains. The FTSE MIB has recently increased by almost 10 percent, the Ibex 35 by almost 7 percent.

In Italy and Spain, securities supervision has now banned short sales on a number of stocks. This is to prevent speculators from continuing to bet on falling prices and thus accelerating sales.

However, market expert Neil Wilson of Markets.com doubts that this could help. Past bans on short sales have tended to result in liquidity being withdrawn from the market and only a little delayed in determining real stock prices, Wilson said. However, they could not have prevented a price decline based on economic fundamentals.

The approval of the FDA for a coronavirus test boosted the shares of the pharmaceutical company Roche in Switzerland. They gained almost 9 percent in value. The leading Swiss index also stopped its price slide by more than 6 percent.

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