EU approves Germany's economy crisis measures
The European Commission has approved two German real economy crisis measures to help firms affected by the global financial turmoil, a press released said here on Tuesday.
The first measure, a 15-billion-euro German loan program, is intended to provide liquidity for undertakings affected by the current credit squeeze. It provides for interest rate reductions on loans to finance investments and working capital of up to 50 million euros to be granted to undertakings with a maximum turnover of 500 million euros, Xinhua reported.
The loans may be granted up to the end of 2010 for a maximum period of 8 years, but all interest rate advantages end on Dec. 31, 2012. Thereafter, the companies will pay market interest rates on the loans.
The program will be administered by the Kreditanstalt fuer Wiederaufbau (KfW), the main public development bank in Germany, in close cooperation with the undertakings' own bankers.
The second measure, a Federal framework scheme, allows economic policy actors at Federal, regional, and local levels to provide aid of up to 500,000 euros per undertaking to firms in need.
These are the first cases to be approved under the Commission's new temporary framework providing member states with additional possibilities to tackle the effects of the credit crunch on the real economy.
"Thanks to intensive cooperation with the German authorities, the Commission could approve these important crisis measures within a matter of days and during the Christmas break," said Competition Commissioner Neelie Kroes. "Germany is the first country to make use of the new temporary State aid framework recently approved to help companies overcome financial problems arising from the current credit squeeze."
The Commission decided that the measure is compatible with the EC Treaty as aid to remedy a serious disturbance in the economy of a member state.