The spokeswoman for the German Finance Ministry Marianne Kothe told reporters in Berlin yesterday that the European Union’s two biggest economies, Germany and France, are working on joint proposals to strengthen investment and encourage growth within the EU. Stimulus packages have proven in the past to provide only short term relief, costing a great deal of government expenditure.
The initiatives are set to be proposed in a meeting between European finance ministers in Milan on the 12th of September. The investment plan requires the help of several European Investment Banks to provide loans to companies, quoting a large sum of 300 billion Euros in the hope to move away from austerity, and to aid the European Central Banks efforts to reduce inflation and improve a weak economic outlook in Europe.
The German Development Bank, the KfW Group, is a beacon to other countries within the EU and may serve as a potential model for other companies. The KfW has provided loans to Greek companies in the recent debt crisis, and although this type of engagement isn’t foreseen in other EU countries in the near future; Ralph Brinkhaus, a member of the German Bundestag, states that KfW development loans are working well where they have been implemented so far.