Germany is set to establish a 100- billion-euro fund to provide loans for companies that have difficulties in borrowing from banks due to the global financial crisis, German Chancellor Angela Merkel has said.
In an interview with local newspaper Bild am Sonntag, Merkel said the package -- worth some 100 billion euros (around 135 billion U.S. dollars) -- is designed to help healthy firms overcome tight credit until normal levels of bank lending resume, Xinhua reported.
"With our package, we will agree on investments in education and our infrastructure, we will improve rules for short-term working benefits to prevent layoffs, and we will create such a fund to help sound companies by providing guarantees if needed," Merkel was quoted as saying.
"We do not need 100 billion euros of new money because this is about guarantees," Merkel added.
Earlier in October 2008, Berlin established a 400-billion-euro loan guarantee fund for banks wracked by the global financial crisis.
Banks wishing to make use of the guarantee must adhere to conditions such as a restriction on executive salaries but loans to companies will not come with strings attached, Merkel said.
The German government is considering the fund because it is worried that large companies could run into liquidity problems this year due to tight credit conditions.
The scheme is part of a raft of measures expected to be finalized at a meeting of Merkel's "grand coalition" government on Monday.