German exporters see recession worsening in 2010

BERLIN - Germany faces a sharp deterioration in corporate credit conditions next year as the full impact of recession feeds through to company balance sheets, the BGA exporters’ association said on Wednesday.

By (Reuters)

  • Follow us on
  • google-news
  • whatsapp
  • telegram

Published: Wed 15 Jul 2009, 7:06 PM

Last updated: Thu 2 Apr 2015, 7:36 AM

‘The credit squeeze will, accordingly, be worse still in 2010,’ BGA President Anton Boerner told a news conference.

Germany has already agreed a ‘bad bank’ plan which allows lenders to divest themselves of toxic assets. The government hopes that unloading the problem assets will help banks to lend, providing a boost to investment and spurring economic growth.

However, Finance Minister Peer Steinbrueck and some other policymakers are concerned that credit conditions may tighten, throttling Europe’s largest economy just as it shows the first signs of emerging from its deepest post-war recession.

European Central Bank data for Germany shows annual growth in lending to non-financial corporations slowed to 3.9 percent in May from 8.5 percent in January, and down from nearly 12 percent in October.

Steinbrueck has written to leading German bankers telling them they have a responsibility to lend money to businesses. He wants to review the credit situation with them on Sept. 1.

He has also floated the idea of Germany’s central bank, the Bundesbank, buying up corporate bonds to help ease a credit squeeze. However, a government spokesman said Germany is not considering granting credit to companies through the Bundesbank.

‘Such considerations are playing no role in the government at the moment,’ spokesman Thomas Steg said on Wednesday.

The global economic downturn has hit Germany’s export sector hard. The BGA expects exports to decline by 18 percent this year, before increasing by 5-7 percent in 2010, Boerner said.

More news from