CREDIT CRUNCH

Trying to Help Greece Help Itself

Merkel Tsipras IfG AfP
Plenty of their plates: Angela Merkel and Alexis Tsipras.
  • Why it matters

    Why it matters

    Many Greek businesses are hampered by the country’s credit crunch, yet they are not getting access to much-needed loans.

  • Facts

    Facts

    • Germany and Greece each contributed €100 million ($112 million) to the Institution for Growth.
    • The joint business development fund was launched in May 2014 to provide loans to SMEs.
    • Only 49 loans totaling €23.5 million have been approved by Piräus Bank, one of two Greek banks entrusted to award the loans.
  • Audio

    Audio

  • Pdf

Rarely has a venture been so euphorically announced by Germany and Greece as the Institution for Growth, a joint business development fund.

However, the fund, launched in 2014, has failed to release all of the €200 million ($224 million) in loans earmarked to help small and mid-sized Greek businesses.

Back in 2013 Germany’s finance minister, Wolfgang Schäuble, had already promised Greece assistance in restoring economic growth.

Chancellor Angela Merkel renewed the promise a year later. During her visit to Athens in 2014, she said conditions must be established “so the economy can once again show its innate potential.” Another aim was to demonstrate that Germany stands not only for tough austerity measures, but also for generous assistance.

But the development project, which has struggled with problems and delays from the very start, is proving how difficult it is to help Greece effectively. This is evident in the German finance ministry’s latest interim report, obtained by Handelsblatt.

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