Thuringia extends the guarantee program for employee shareholdings until 2028

Thuringia extends the guarantee program for employee shareholdings until 2028

According to a report by www.volksstimme.de, the Ministry of Finance in Erfurt has announced that the program to provide guarantees for employee shareholdings in companies has been extended until the end of 2028. The program has existed since 1995 and stipulates that the Free State will cover up to 80 percent of the financing amount paid in if a company becomes insolvent and cannot repay the employee contributions. The maximum amount is 250,000 euros per company and, for employee financing in the form of loans, one million euros per company. The minimum term of employee financing is five years.

For companies, employee financing offers the opportunity to retain employees and retain skilled workers, according to Finance Minister Heike Taubert (SPD). They are an effective tool, especially for new start-ups. These are usually so-called silent partnerships in which the companies remain free to make their decisions.

This extension of the program can potentially have a positive impact on the market. Companies could increasingly make use of employee financing options in order to retain skilled workers and attract new employees. This could lead to higher employee retention and increased motivation because employees are directly involved in the company's success.

Financial support from the state could also lead to new start-ups being strengthened. Companies could grow faster and create jobs because they can count on the financial support of employees. As a result, the economy in Thuringia could develop positively overall.

Overall, the extension of the program to provide guarantees for employee participation in companies appears to be a positive development for the market and the financial sector in Thuringia.