government guarantees

Government guarantees are promises made by the government to ensure that certain financial obligations will be fulfilled. For example, if a bank loans money to a company that has a government guarantee, the government agrees to step in and pay back the loan if the company cannot. These guarantees reduce risk for lenders, encouraging investments and economic activity. They do not mean the government directly loans money, but they provide assurance that the government will support the repayment if necessary. Essentially, they act as a safety net, boosting confidence in otherwise risky financial transactions.