Eurozone corporate lending stalls curbed by credit limits

Photo: EPA

Recession is strongly advancing in the Eurozone as ECB figures showed a slowing pace in corporate lending and financing, Reuters reported. The big story behind this phenomenon goes back to 2020. In the peak times of pandemic lots of European companies rushed to secure funds to offset the expected lowdown. The slowdown came and still goes on but the majority of firms have already reached their credit limits and can not afford more loans.

Lending to non-financial corporations in the 19-country euro area slowed to 7.0% in January from 7.1% month earlier, a relatively high level not far from a 10-year high of 7.4% hit in May.

But the monthly flow of credit to firms was a minus 0.2 billion euros as small rises in the bloc’s biggest countries - Germany, France and Italy - were offset by drops elsewhere, including Spain and the Netherlands. The slowing in credit activity prompts a slow recovery for the Eurozone companies.

Household lending growth meanwhile slowed to 3% from 3.1%, broadly flatlining since April. The monthly flow of fresh loans, however, slowed to its lowest rate since last April.

The annual growth rate of the M3 measure of money supply, mostly a reflection of the ECB’s copious bond purchases, accelerated to 12.5% from 12.4%, in line with market expectations.

Similar articles

  • Credit Suisse ends a spying scandal

    Credit Suisse ends a spying scandal

    Swiss bank Credit Suisse announced it had reached an agreement to end a spying scandal that involved its former employee Iqbal Khan. The allegations of spying had led to the resignation of the Chief Executive Tidjane Thiam, Reuters reported quoting a spokesperson for the bank. "Everybody involved has agreed to settle and this matter is now closed," Simone Meier said, confirming a report in Swiss newspaper NZZ am Sonntag said.

    31
  • IMF approves largest expansion to fight pandemic

    IMF approves largest expansion to fight pandemic

    The executive board of the International Monetary Fund approved on Friday a $650bn expansion in resources in an effort to support economically vulnerable nations as they battle the Covid-19 pandemic. As noted by IMF Managing Director Kristalina Georgieva, that the new support is the largest such expansion in the history of the 190-nation lending institution but it would be a “shot in the arm for the world.”

    60