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Did Germany’s KfW support scheme fail?

State-guaranteed lending to help hard-hit firms in Germany has lagged its equivalents in France, Spain, Italy and the UK. State development bank KfW says that’s a good thing.

Dominic O'Neill on Europe 1920px.jpg

Despite offering twice as much liquidity to corporates as everyone else, Germany has extended fewer state-backed coronavirus emergency loans than any other big economy in Europe.

France, Spain, the UK and Italy are ahead of it in this regard. Indeed, French state development bank BPI had agreed state-backed coronavirus loans of more than €100 billion by mid-summer.

By contrast, Germany’s coronavirus loans programme, managed primarily by BPI equivalent KfW, had inked less than half that number by then, despite the much bigger size of the German economy.

We thought the numbers would be much higher and we are happy that they are not that high
Lutz-Christian Funke, KfW

Of the €756 billion in new state-backed coronavirus loans that Berlin pledged in March – about twice as much as any other European state – only 5% was committed by the end of June, according to end-of-June figures compiled by Brussels think tank Bruegel and the Peterson Institute.

By then, Italy had reached about 17% of its commitment, like France, of €300 billion.

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