June 16, 2009

Tight credit conditions are putting a squeeze on German firms that may hamper an economic recovery unless the government intervenes, industry groups said.The government should make enabling the financing of businesses a priority if a damaging credit crunch is to be avoided, the head of Germany's BDI industry association, Hans-Peter Keitel, told a conference in Berlin on Monday.'We need functioning capital markets with clear frameworks. Politicians must work at this with great haste,' he said in a copy of a speech delivered at the conference.

'Capital markets have forced companies to increasingly do business with the short-term in mind,' he added.Germany is facing its worst recession since World War Two, and waning global demand has already hit its key export-oriented manufacturing sector hard.Manufacturing orders had fallen nearly every month since the end of 2007 until March, then held steady unexpectedly in April, bolstering hopes for a recovery in the battered sector.