Credits for small companies in Spain may be provided by Germany

GERMANY may agree to provide 'special credits' to small and medium-sized businesses in Spain and Portugal to help them grow, and later to those in Greece.

According to German national daily Der Spiegel, the central European country's equivalent of Spain's Official Credit Institute – the KfW – is considering investing up to 10 billion euros in small companies and sole traders' enterprises in the southern EU nations, taking advantage of currently low interest rates.

Finance minister for Germany Wolfgang Schäuble (pictured), in a letter to economy minister Philipp Rösler, compared the situation of Spain, Portugal and Greece vis à vis the rest of Europe with that of East and West Germany before the fall of the Berlin Wall.

According to Schäuble, many southern European countries are in a similar condition to East Germany – without the communism, but in terms of poverty and financial struggle – and that before the country was united, West Germany used to send aid to its counterparts behind the Iron Curtain.

He said companies in crisis-torn European countries would benefit greatly from increased access to capital markets and would be able to create jobs or, at least, by staying afloat, not contribute to the jobless figures.

The German finance minister said Spain, Portugal and Greece were 'in danger of losing an entire generation'.