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UPDATE 1-KfW head confident German export aid can be boosted

Published 09/17/2009, 10:30 AM
Updated 09/17/2009, 10:33 AM

(Adds detail, background)

BERLIN, Sept 17 (Reuters) - The 1.5 billion euros in export aid provided by German state-owned lender KfW should be able to be increased "fairly easily", the bank's head said on Thursday.

The aid scheme, aimed at unclogging the supply of export credit, allows the KfW to provide financing to banks so that they in turn may support exporters -- a major pillar of Europe's largest economy.

"I believe that once the 1.5 billion euros are used up in two weeks, then it should be fairly easy for us to convince the government to provide more," KfW Chief Executive Ulrich Schroeder told Reuters in Berlin.

"My impression is that the volume won't be a stumbling block," he added, noting he had already received signals to that effect from Chancellor Angela Merkel's office.

The European Commission said on Tuesday the German plan was in line with guidance provided last October on national measures to help banks hit by the crisis.

The Commission authorised the plan for six months, though Germany's Economy Ministry has already said it hopes to extend the export aid until the end of 2010.

Germany, the world's biggest exporter of goods since 2003, introduced the export aid plan after exporters complained that they were suffering from tight credit conditions.

The BGA exporters' association said on Tuesday German exports could rise by 10 percent or more in 2010, after a steep fall in trading activity this year.

(Reporting by Klaus Lauer, writing by Dave Graham; Editing by Toby Chopra)

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