Germany is to provide technical assistance to Portugal to help it emerge from its debt crisis and boost economic growth, dpa cited the finance ministers from the two countries as agreeing Wednesday. The state-owned German development bank, the Kreditanstalt fuer Wiederaufbau (KfW), is to provide the know-how needed to create a new Portuguese financial development institution, German Finance Minister Wolfgang Schaeuble and his Portuguese counterpart Vitor Gaspar said in a joint statement released at their talks in Berlin. The new Portuguese development institution is "a vital instrument for investing in sustainable growth and job creation in Portugal," Schaeuble and Gaspar said. In particular, Germany hopes that assistance from the KfW will help to address the financing and capitalization needs of medium-sized enterprises (SMEs) in Portugal, which in 2011 became the third eurozone state to receive a European-led bailout. "The gradual restoration of credibility has led to great improvements in (Portugual's) access to financial markets," the ministers said. "However, the reduction in borrowing costs of the sovereign debt has still not been fully transmitted to the rest of the economy," they said. The talks between the two ministers also focused on the steps needed to tackle youth unemployment, which has climbed to record levels in parts of the eurozone as result of a long-running recession and fiscal austerity. Speaking at a joint press conference with Gaspar, Schaeble called on Europe to step up the pace to fight against unemployment. "We need to be successful," Schaeuble said, underlying the key role that SMEs could play in reducing job queues. Portugal also stands to benefit from the creation of Europe's planned banking union, which would help address the excessive cost of bank finance and improve access to credit, especially for SMEs, the two ministers said.
