“There is a lot of money in the banks and at the European Central Bank but not enough investment,” Schaeuble said at a joint press conference at a country hotel near Granada in southern Spain. “That is where we want to take measures.”
The two countries backed a program that will seek “sponsors” who will encourage investors in Germany, Spain and other countries to provide equity financing for competitive companies, said de Guindos. Increasing the capital of smaller companies will help them tap bank financing, he added.
The International Monetary Fund has called on Germany to allow peripheral euro members to ease up on austerity policies, and Schaeuble signaled last week that he will join the European Commission in endorsing Spain’s decision to postpone by two years its program to meet the European Union’s 3 percent budget deficit limit.
The Spanish government last week forecast that its unemployment rate will remain around 25 percent until at least 2016 as it tries to reboot the economy while meeting European demands backed by Germany for budget cuts.
The joint German-Spanish program aims to avoid “the long route through European institutions” and instead see both governments engaging together with lenders, Schaeuble said. The ministers didn’t say how much money they hoped to raise through today’s agreement.
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