Several EU countries report that the credit crisis is easing with the number of loans to SMEs on the rise, but the picture for most companies remains grim.
BusinessEurope, the EU business lobby, has warned that bigger firms are availing of bank loans to a greater degree than in the past, making financial institutions even less inclined to lend to SMEs (EurActiv 15/7/09).
Governments in a number of member states are flexing their political muscle by leaning on banks which have been slow to lend to businesses and consumers. With financial institutions in most countries having benefited from an injection of government capital since the advent of the global financial crisis, governments now have greater influence over lending practices. In addition, a number of governments have rolled out guarantee schemes in a bid to support risk-averse banks.
For its part, the European Central Bank has slashed interest rates to a record low of 1% and the European Investment Bank has promised €30 billion in loans to SMEs and guarantees, and will share risk with commercial lenders.