Berlin and Madrid will create a fund by which the German funds and businesses can invest in Spanish small and medium businesses which have the possibilities of being competitive and ability to generate employment, in a moment when the small businesses are suffocated because of the lack of credit even though they confirm their solvency.
Guindos assured that this mechanism “with a scheme of sponsorship and patronage” will be ready “in a very short time” probably at the end of May. The intention of both Governments is that capital from Germany can be injected to the Spanish small and medium businesses with a possibility of development.
The idea “is still opened”, “but it is very little probable that it will have also public money”.
The Spanish Government has been claiming for months about policies in Europe that favor the creation of employment and that improve the problem of the liquidity of the businesses, because of his own incapacity to solve it. The European Central Bank (ECB) is studying to stimulate the credits to small and medium businesses reducing the collateral required to the Banks for these loans when they go to this organism.
The plan of reforms that the Council of Ministries approved last Friday takes into account in some way an injection of loan till 45.000 millions for small and medium enterprises with the cooperation of Official Credit Institute in Spain ( ICO) and the Banks, even though these similar stimulations have never offered big results.
Basis of the Spain-Germany agreement in order to create employment:
1.- Although the final instrument must still be decided, the Spanish and German Governments “will sponsor a fund" that will be a vehicle for investment of German businesses and entities in Spanish small and medium businesses, which are “competitive” and have “the ability of generating employment” mainly for young people.
2.-Every ministry will name a person of his office to create a team of two persons that will coordinate the proposal. This project must be finished in “a very short time”, that may be presumably at the end of May.
3.-The final formula has to be decided, but from Berlin they indicate that “it is very little probable that this new instrument is supplied with public money” so the investment will have to come from German investors, who have detected possibilities of investment in the Spanish economy.
"Jaramago", A plant from the south of Spain in Spring, by Phranet, at flickr.com