Afp, Berlin

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Germany is set to hand out hundreds of millions of euros in compensation after it announced Wednesday support for tourists affected by the collapse of British travel group Thomas Cook.

In a statement, Chancellor Angela Merkel’s office said Berlin will reimburse “losses which have not been compensated” by the now insolvent package holiday group and its insurance company.

A quirk of German law meant that Thomas Cook’s German arm only had bankruptcy insurance up to 110 million euros ($122 million).

Insurer Zurich Versicherung in November reported claims totalling 250 million euros.

But citing experts, broadcaster NTV estimated the total losses sustained by customers at 500 million euros -- leaving a potential gap of 390 million for the federal government to bridge.

Berlin said the Thomas Cook case had “far exceeded the boundaries” of previous travel company insolvencies, throwing up “a number of difficult legal questions which are still unsolved”.

“It is not reasonable to expect customers to deal with these complex legal questions on their own,” the statement added.