Berlin - German Chancellor Angela Merkel and her party eased Saturday their opposition to using a multi-billion state fund to nationalize industries that are reeling from the world recession. Only a day earlier, Merkel had said through a spokesman that the planned 100-billion-euro (135-billion-dollar) fund would merely extend financial guarantees to troubled companies such as the Opel division in Germany of the US carmaker General Motors.
But after a meeting Saturday in the central city of Erfurt with leaders of her Christian Democratic Union (CDU), Merkel said, "At the present time it is utterly impossible to describe every conceivable constellation in advance."
Merkel stressed that the fund would be structured differently from Soffin, a bank stabilization fund with 480 billion euros at its disposal. Soffin this week acquired one quarter of the equity in Commerzbank, one of Germany's leading banks.
She said the focus for industry would be on guarantees to back bank loans, but there might also be guarantees on corporate bonds.
Roland Koch, CDU premier of Hesse, where Opel is located, said in Erfurt it was vital that the state should be able to take part ownership of companies although this should remain the exception.
In remarks to appear Sunday in the newspaper Bild am Sonntag, Merkel said the fund would help companies in need when they were "intrinsically healthy."
She is set to meet Monday with other parties in her coalition to decide on new economic stimulus moves.
