2nd UPDATE: German Econ Min:Credit Crunch Must Be Discouraged
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By Patrick McGroarty
Of DOW JONES NEWSWIRES
BERLIN -(Dow Jones)- German development banks may have to issue credit
directly if commercial institutions remain hesitant to lending, Economics
Minister Rainer Bruederle said Thursday.
The threat of a credit crisis if banks don't step up lending is "a serious
problem that we face," Bruederle told attendees of a retail industry conference
in Berlin.
"It wouldn't be pretty, and surely the banks don't want us in an emergency to
use the development banks to compensate for the crunch," Bruederle said.
As economic conditions improve, Bruederle said, the German government is
obliged to wind down its own stimulus efforts and return to banks the work of
pumping credit into Europe's largest economy.
He added that urging German banks to avoid a future credit crunch will be on
the agenda for a summit between the government and economic players Dec. 2.
On Wednesday, Chancellor Angela Merkel said the December meeting would bring
together banks, businesses and trade unions to discuss methods for overcoming
the economic and financial crisis.
Merkel also said Germany's cabinet will work on a plan for a "sustainable,
economically viable and environmentally friendly energy supply," to be published
by October 2010.
-By Patrick McGroarty, Dow Jones Newswires; +49 30 2888 4128;
patrick.mcgroarty@dowjones.com
(END) Dow Jones Newswires
11-19-090843ET
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