Germany is poised to unveil a multi-billion-euro fund to aid companies unable to raise loans from banks wracked by the credit crisis, Chancellor Angela Merkel said. The package - worth some 100 billion euros ($135 billion) - is designed to tide otherwise healthy firms over until normal levels of bank lending resume, she said in an interview with Bild am Sonntag to appear Sunday. “We do not need 100 billion euros of new money because this is about guarantees,” Merkel was quoted as saying. Berlin has already established a 400-billion-euro loan guarantee fund for banks affected by the global financial crisis. Banks wishing to make use of the guarantee must adhere to conditions such as a restriction on executive salaries but loans to companies will not come with strings attached, Merkel said. The scheme is part of a raft of measures expected to be finalized at a crunch meeting of Merkel's “grand coalition” government on Monday. Other proposals may include a cut in the base rate of income tax from 15 percent to 12 percent, a spokesman for Finance Minister Peer Steinbrueck revealed earlier Friday. Merkel is under increasing pressure to pull Germany out of what analysts fear could be its most painful economic slump in 60 years. Berlin has been widely criticized for a tentative approach to the financial crisis. The CDU will put its ideas to its conservative Bavarian sister party and the Social Democrats, with whom it shares power, at a meeting on Monday when they are due to decide on the stimulus package.
