Spanish companies have already benefited, Irish companies soon follow. Now the Italian SMEs will benefit from favorable loans from a German source.
On Wednesday signed the KfW and its Italian counterpart, the Cassa Depositi e Prestiti (CDP) in Rome an agreement for a global loan of 500 million euros that come from its own funds of the German development bank. 300 million euros of which are provided for loans to SMEs with a turnover of 50 million euros. The CPP is the loans – according to the model of KfW – not forgive themselves, but pass it on to local commercial banks, which should then be sufficient loans. the energy efficiency of private companies should be encouraged in the area of public infrastructure with the other 200 million euros – which could be, for example building renovation local power company.
The aim of the agreement is the one that the EU develop desired cooperation between national development banks, explained KfW Director Lutz-Christian Funke. On the other hand, access to discounted loans scheduled to open in the Italian middle class. The CDP could the money indeed take itself on the financial markets. But because KfW has thanks to Federal Government guarantee on the rating grade AAA, they can refinance at much better conditions than the Italian CDP whose credit rating is equal to several stages worse.
Therefore, the German development bank can grant preferential interest rates for loans – in this case to Italy. The exact conditions for receiving plants then set the Italian Institute. A detailed control over the use of funds, KfW has not, since it is a global loan. However, there are clear guidelines for the award of the loans, it said. The default risk that KfW can be removed in many politically motivated projects by the federal government, but this time remains in the balance of the development bank.
100 million euros for Greece
“Our expertise in SME financing is not only in Germany but Europe-wide demand,” the KfW Board Chairman said Ulrich Schröder to sign the contract. “At the same time we give this credit line to our Italian partner institute a major boost to job creation,” he added. A similar global loan to the Spanish development bank ICO has been a big hit in 2013, explained spark that funds had been within three months. However, they had at that time also had a good fortune just happen into the loan at a time of the first economic boom in Spain after the Great Depression, he admitted. For the Spanish global loans, the federal government has assumed the guarantee against failure.
In Ireland, in September the new development bank SBCI has been established that (EIB) receives from the KfW and the European Investment Bank global loan of 500 million euros to finance the Irish middle class. Of this, 150 million euros from KfW, they are guaranteed by the federal government. A newly established development bank (IFD) in Portugal supports the German Institute through knowledge transfer.
In Greece, the KfW also advises the local government in building its own development bank (IFG) for the middle class. Both KfW and the Greek government have to date each given 100 million euro as a global loan to a trust, which, however, sits in Luxembourg. In addition, KfW has given knowledge of their advocacy and their transit system of credits to other European countries, even in countries like Britain or France.
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Global loans to other countries to help small and medium-sized enterprises KfW have forgiven again and again even before the great financial crisis, explained Funke, who heads the European projects for the development bank. However, there had been an order of magnitude between 50 and 100 million euros rather than, he added. However, the EU wanted since the crisis that the development banks have to work and that in particular the big banks also finance more projects. “KfW is particularly in demand as the largest player in addition to the EIB here,” Funke said.
The Cassa Depositi e Prestiti was founded in 1850 and is a public limited company in which the Italian government holds 80.1 percent of the shares. The second owner is 18.4 percent banking foundations. The main source of funding is not the international capital market, but government-guaranteed postal savings.