“These measures remind me of the blueprint we
designed 10 years ago in Germany to get finance to SMEs,” mused Günther
Bräunig, member of the executive committee at KfW, at the ICMA AGM in Berlin on
the same day. That is not to say he isn’t a fan: “We did more than €120 billion
of synthetic securitization structures under that programme, all of which have
been paid back.”
While the ECB is clearly throwing its
weight behind SME securitization, Bräunig was, however, more circumspect. “If
SME securitization is going to work, it needs to come in size and it needs to
provide capital relief for banks,” he said. “It will only be part of the
solution in the periphery.”
What KfW is certain will also be part of
that solution is its intervention to boost SME lending in periphery countries, including Spain and Greece.
In July last year, the state-owned lender signed a
€800 million loan agreement with Spanish development bank ICO to boost lending
to Spanish SMEs. In May, it signed the first of three planned
sub-funds under which the state of Greece and KfW will each provide €100
million to a new umbrella fund, the Institution for Growth in Greece.
will refinance existing loans and issue new credit to Greek SMEs via Greek
banks. Greek finance minister Yannis Sournaras has described KfW’s involvement
as “a catalyst to attract capital from private investors, too”.
structure, the Greek state takes the first-loss risk in the fund, with KfW taking
the second-loss position. The hope is that private capital can subsequently be
attracted at the senior level. It is understood that France's Caisse des Depots et Consignations (CDC) may be considering participation in the scheme.
Michael Meister, parliamentary state secretary for finance
Speaking to Euromoney after delivering a
keynote speech at the ICMA meeting, Michael Meister, parliamentary state
secretary at Germany’s federal ministry of finance, threw his weight behind the
“There is a lot of liquidity in the market and it doesn't
reach the real economy in some places,” he said. “All economies in the eurozone
have to be competitive and we need structural reforms. For each country, what
could be done to strengthen competitiveness? This is where politics
can get involved.”
Meister argues that Germany’s post-war experience shows the
way for struggling peripheral economies today.
“In Germany, we had to rebuild after World
War II, and KfW was the way to do it," he said. "These were the instruments to solve the problems.
We need to install the mechanism which KfW has established in Germany in
Greece. We need to transfer know-how.”
On May 22 the Irish government announced
the establishment of the Strategic Banking Corporation of Ireland which will
provide €500 million in new credit for Irish SMEs. The scheme will be initially financed by KfW and the European Investment Bank
(EIB) together with the directed portfolio of the Ireland Strategic Investment