Brussels - Germany will be permitted to give low-interest loans to companies making environmentally-friendly products until the end of 2010, in a further effort to beat the recession in Europe's biggest economy, the European Union's executive said Wednesday.

The commission decision clears Germany to offer interest-rate cuts of up to 50 per cent for small and medium companies, and up to 25 per cent for large ones, if they make "products that will meet or surpass future (EU) environmental protection standards."

The EU is keen to channel some of the billions of euros it has deployed to kick-start the economy into producing more eco-friendly, and especially climate-friendly, products.

"The European Commission has authorised ... a scheme offering reduced-interest loans to businesses investing in the production of environmentally friendly products, as part of the German package to tackle the current economic crisis," a commission statement said.

"It will allow state, regional or local authorities to grant until 31 December 2010 loans with subsidised interest payments until 31 December 2012 at the latest," the statement said.

On July 22, the bloc set out new eco-standards for TVs, fridges and electric motors in a further bid to make its manufacturers invest in low-energy, low-emissions production.

Also on Wednesday, the Brussels-based executive approved a German scheme for providing short-term export credit insurance. (dpa)