BERLIN--Germany plans to lend small and medium-sized companies
in recession-hit Spain around 1 billion euros ($1.30 billion) via
German state-owned bank KfW, according to finance ministry
documents seen by Dow Jones Newswires.
"The measures are part of an overall strategy to promote growth
and employment, particularly of young people, in certain so-called
program countries in the euro zone," said the covering letter from
Deputy Finance Minister Steffen Kampeter to the head of the
parliament's budget committee dated May 31.
The budget committee of the lower house of parliament will meet
Wednesday to discuss the measures, which involve development bank
Kreditanstalt fuer Wiederaufbau lending Spanish state-owned
business lender Instituto de Credito Oficial EUR800 million to make
liquidity available to companies.
KfW will also provide funds to strengthen the capital base of
small and medium-sized companies in Spain, which despite record-low
interest rates from the European Central Bank still face trouble
accessing credit from banks at reasonable rates.
The support for Spanish companies should provide a model for
helping other countries, particularly Portugal, the ministry
documents said.
German leaders, particularly Chancellor Angela Merkel and her
Finance Minister Wolfgang Schaeuble, have been lampooned in
southern Europe for Berlin's pro-austerity policies, which some
blame for grinding recessions in the Iberian economies.
Mr. Schaeuble floated the idea of bilateral aid to help Spanish
businesses create jobs more than a month ago, although the latest
documents from his ministry are the first indication of the sums
involved.
Youth unemployment currently stands at nearly 56% in Spain and
38% in Portugal, levels which the minister has described as
"catastrophic."
Write to Andreas Kissler at andreas.kissler@dowjones.com
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