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Government wants to encourage private equity

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KfW-Zentrale in Frankfurt. Die Finanzierungs-Probleme deutscher Unternehmen halten an. Quelle: dpa

KfW headquarters in Frankfurt. The financing problems of German companies to maintain. Source: AP

BERLIN. The Permanent Secretary, Federal Ministry of Economic Affairs, Ernst Burgbacher, broke a lance for private equity. "No one can seriously doubt that we need private equity," said Burgbacher, in personal union middle class representative of the federal government, in an interview with the Handelsblatt.

Investors should pay taxes

Equity could make a contribution to resolve the equity misery German SMEs. He therefore set up for better conditions. It would thus be clear that the investor and not the private equity fund is taxed. However, continues the recovery of the private equity market. The investments quadrupled in the first quarter compared to the previous year to € 1.3 billion, reported the industry association.

But not only the classic private equity industry is set to investments. The CEO of KfW banking group, Ulrich Schroeder confirmed on Thursday that "there are relatively well-advanced plans" to launch its own medium-sized funds. Concrete plans should the Board on 10 June will be presented. were not denied reports that the KfW in this project with the Commerzbank wanted to cooperate and to include in the fund is worth 300-500 million euros.

The German Bank has already launched an SME Fund on € 300 million. The Savings Banks Finance Group is engaged with a volume of € 550 million to equity.

In the most recent company survey of KfW in 4600 after companies spent 35 percent last year to now 42 percent, is difficult to gain access to credit. Particularly affected were small businesses, which has more than half of the problems with borrowing. Reasons for the difficult borrowing were mostly missing assets and increased interest rates.

Relaxation signaled, however numbers of the Ifo Institute for Economic Research. While 35.6 percent of the establishments, called restrictive bank lending – that are 0.5 points less than last month.

From a nationwide credit crunch may not speak, KfW, but the difficult funding could jeopardize the economic recovery. For both the firms were in the KfW survey again significantly invest in new projects than last year. In the coming months will show in the negotiations with the banks, whether it is possible for companies to finance planned investment. Should they fail to do so, could the lack of credit supply jeopardize the recovery.