A solidarity loan of the German promotional bank KfW to the Italian promotional bank is intended to support liquidity aid for small and medium-sized enterprises in Italy which has been particularly hard hit by the Corona crisis. A volume of 1 billion euros would be a first step. This is the gist of a joint paper written by Green Members of the German Bundestag Sven-Christian Kindler and Franziska Brantner and Green MEP Sven Giegold. Together, they are calling on the German government to make a contribution to support the Italian economy and at the same time send a European signal of solidarity.
Sven Giegold, spokesperson of Bündnis 90/Die Grünen in the European Parliament, explains:
“Germany must stand by Italy in this serious crisis. An unbureaucratic loan from KfW to the Italian promotional bank to support Italian small and medium-sized enterprises would be a strong sign of European solidarity. One billion would be a start. Germany, as the economically strongest country, should lead the way here. Germany should use its considerable fiscal leeway to support not only the German economy but to a limited extent also the Italian economy. This would also make economic sense, since the European economies are closely interwoven and a recession in Italy also affects all other European countries. The loan would enable KfW to use its favourable financing conditions, thanks to Germany’s good credit rating, to benefit Italian companies directly. The German Government could bring other European promotional banks on board for this assistance.
It is fatal that the heads of state and government still cannot agree on a joint approach to stabilising the European economy. While courageous action at European level is still urgently needed, economically strong countries like Germany should already be leading the way today and supporting their European partners. Time is pressing, because every day healthy companies slide deeper into the red. On Thursday, the heads of government must finally adopt a comprehensive European aid programme to prevent a deep split in the eurozone. The European governments must not leave the ECB alone again in fighting the crisis. The heads of government should now swiftly activate the ESM’s precautionary credit lines for all euro states without austerity measures and thus prevent speculative attacks on individual euro countries. In the long term, we finally need to complete the banking and fiscal union, including joint deposit reinsurance and central fiscal capacity to stabilize the economy in the event of a crisis”.
Green proposal for KfW aid loans for small and medium-sized enterprises in Italy: