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ECB study highlights credit crunch for Greek companies
[FRANKFURT] Companies in Spain and Germany are finding it easier to borrow but Greek firms are struggling to secure funding despite an overall improvement in credit availability across the eurozone, the European Central Bank said on Tuesday.
Its biannual survey of lending conditions illustrates the stark differences between prosperous and poor countries in the 19-member currency bloc.
In particular, it highlighted the drastic situation facing Greek companies, where profits are tumbling and access to credit is being choked off as the government wrangles with European backers to avoid a possible default on sovereign debt.
While on balance 29 per cent of small companies surveyed in Germany and 11 per cent in Spain reported higher turnover in March 2015, 18 per cent of Greek companies saw theirs dip. In Italy, 12 per cent of firms, on balance, saw a fall in turnover.
To compound the problem in Greece and a number of other countries, access to finance is getting ever harder. On balance, almost 30 per cent of Greek companies signalled difficulties getting a loan or overdraft.
The research illustrates the differences across the uneasy alliance of countries that make up the euro zone, despite a gradual and wider economic improvement.
This gap often leads to tensions, such as the clash between Greece's new leftist government and its international backers about curbing spending. Many in Athens believe such belt-tightening is ruining its economy.