Since the beginning of the COVID-19 crises the establishment of new state-owned funds with expiration dates has accelerated. This new type of fund acquires shares or silent partnerships, or it would take over other components of a company's equity. Through recapitalization, the state funds' assets grow when the injection of capital is needed and the funds shrinks during periods of economic recovery. In other words, the expiration date ensures the eventual transfer of equity stakes to private ownership. While this is a sensible choice for avoiding generous public handouts for ailing firms some unintended long-term risks remain. Many debt and equity investments have been directed into sectors such as the automotive, energy, or aviation industries. These sectors will face increasing pressure in the future due to structural and policy-induced changes (e.g., decarbonization efforts to reduce climate change).
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The author is grateful for support from the Austrian Science Fund (FWF): J 4302‐G31.
© 2022 The Author. Global Policy published by Durham University and John Wiley & Sons Ltd.