Germany could expand its small business loan scheme to EU strugglers

Portugal and Greece are interested in the same kind of support for lending to small business that Germany agreed with Spain recently, a spokeswoman for the German finance ministry said, but they will need a state financing body to qualify.

Anxious to support growth and combat unemployment elsewhere in the eurozone, Berlin has laid out a scheme to grant Spanish small and medium-sized companies (SMEs) aid of roughly €1 billion.

A German magazine reported on Saturday that the government wants to extend the scheme to make it easier for companies to get credit in other countries across the currency area’s crisis-stricken southern half.

The spokeswoman said the measure was part of an overall strategy to promote growth and employment, especially for young people, in the countries which have been bailed out in Europe’s debt crisis.

“We must succeed in solving the acute financing problems of companies that have a robust business model and good growth prospects,” she said in a statement, asked to confirm the magazine report.

The scheme for Spain will see German state development bank KfW provide loans to state credit agency Instituto de Credito Oficial (ICO), which will pass the money on to small companies.

The spokeswoman said both Portugal and Greece would need a similar agency to receive such loans.