SMEs in countries with debt crisis pay 85% more for financing, according to Funcas
- According to data from February 2012, Spanish SMEs supported a higher banking interest rate by 77% than the German ones.
- They are the conclusions of an article in the last issue of ‘Cuadernos de Información Económica’ of the Foundation of Savings Banks (Funcas).
- The author believes the banking union is “urgent” and says that in countries such as Spain or Greece, bank rates are influenced by the risk premium, not by the ECB.
Small and medium-sized enterprises ( SMEs ) have the most difficult access to finance in European countries that have suffered from the debt crisis, the so-called distressed countries : Cyprus, Spain, Greece, Ireland, Portugal, Italy and Slovenia.
Since 2007, in these countries, bank interest rates have skyrocketed, investments have declined and, in addition, austerity policies have had more consequences, for example, in the deficit.
For this reason, companies in these countries pay 85% more for their financing than the rest, according to Joaquín Maudos, Professor of Economic Analysis at the University of Valencia, in the latest issue of Economic Information Notebooks of the Fundación de Savings Banks (Funcas).
Maudos, who believes “urgent” banking union in Europe, adds that, according to the average monthly data of 2012, the interest rate in the eurozone of loans of less than one million euros is 164 basis points higher than those of higher amount, but that in the distressed countries the extra cost in the financing of companies is 270 points (loans of less than one million) and 208 (of more than one million), hence the extreme situation of SMEs.
Differences between countries
If we talk about differences between countries , that a small or medium company is financed in Greece, Portugal and Cyprus is 50% more expensive than the European average; On the other hand, in countries such as Belgium, Luxembourg and Austria, the interest rate on loans is 40% cheaper. In the case of families, the country with the highest interest rate on consumer loans is Estonia (19.6%) and Finland with the lowest interest rate (3.7%).
In Spain, SMEs had a financing cost somewhat lower than the average for the euro area before 2008 , that is, before the crisis.
Afterwards, the trend changed and the interest rate stood at 195 points in 2012 over countries without a debt crisis (79%) and 105 points above the euro zone average (35%) ; with respect to German companies, Spanish companies had a higher banking interest rate of 77%, according to data from February last year.
Also, Spanish SMEs paid on average in 2012, the article said, an interest rate 238 points higher than large companies. 47% of Spanish SMEs, according to a recent ECB survey cited in the article, “declares that the willingness of banks to give financing has worsened in the last six months”.
Maudos blames all these differences between countries on the “financial fragmentation” of the European economy and explains that the interest rates set by banks are heavily influenced by the risk premium in distressed countries , rather than by Central Bank interventions European. As a result, it breaks “the main channel of transmission of monetary policy,” he says.
Another article of the magazine, signed by Pilar L’Hotellerie-Fallois and Javier Vallés, highlights that the central banks of the developed economies have printed an increasingly expansive tone to their monetary policies, “and have maintained it for a record time” .
In his opinion, the ability of monetary policy to support recovery is ” limited, and can not replace the processes of structural reforms or solve the solvency problems of the financial system.”
Finally, the article signed by María Jesús Fernández assures that an “overly optimistic” analysis is being made of the potential of the foreign sector in terms of the role it will play in the short term to introduce a “solid and sustained” recovery in the economy. .
“This should not be based solely on exports , but should be supported by the reactivation of domestic demand,” advises Fernandez.