Germany is pledging to cancel debts of up to (EURO)240 million ($340 million) owed by Egypt and invest the money in supporting the country's democratic reform process.

German Foreign Minister Guido Westerwelle and Egyptian counterpart Mohammed Amr on Friday issued a joint statement that called for debt forgiveness over the next four years.

Westerwelle said the money would go to "jointly agreed reform measures." He said Germany separately is giving Egypt (EURO)150 million to help build democratic institutions.

Friday's statement says that Germany will support the setting-up of an Egyptian forensic lab among other measures.

Westerwelle has long stressed the importance of backing up democratic change in Egypt by ensuring that the economy gets back on its feet.