German Finance Minister Wolfgang Schaeuble proposed on Saturday that 50 billion euros of Greek public assets be transferred to an external fund and privatized over time. The fund he used as a suggestion, the Institution for Growth in Greece, is owned by the German bank KfW, whose current Chairman of the Board of Supervisory Directors is Schaeuble himself.
KfW is a German government-owned promotional bank. German Vice Chancellor Sigmar Gabriel is the Deputy Chairman of the Board of Supervisory Directors.
KfW had agreed with the Greek government on the creation of three different sub-funds under the Institution for Growth in Greece.
“The first of three planned IfG sub-funds was founded on 7 May 2014 in Luxembourg. The Hellenic Republic and KfW — on behalf of the German Federal Government — will each contribute EUR 100 million in funding debt to this sub-fund. These funds will be lent to small and medium-sized enterprises in Greece in the form of loans from Greek on-lending banks. The IfG will thus make it easier for Greek SMEs to access investment loans and working capital, thereby contributing towards the recovery of the Greek economy,” a press release from May 20, 2014 reads.
Negotiations for establishing the IfG had started in 2012 with the Greek government officially endorsing it in February 2013.
“In February 2013, the Greek Minister of Development and Competitiveness Kostis Hatzidakis approved the proposed concept for an IfG umbrella fund with three different sub-funds to be founded according to their specific promotional purpose: one sub-fund that will provide borrowed funds to Greek SMEs, one sub-fund that will provide equity capital to Greek SMEs and one sub-fund for financing infrastructure projects,” the same release states.
Schaeuble had suggested on Saturday that the 50 billion euros be transferred “to an external fund like the Institution for Growth to be privatized over time and decrease debt”.
Reports from Sunday’s negotiations have alleged that the Greek government has adamantly rejected this option.