The lack of credit in the real economy and the paucity of cash available for investment have been cited all over Europe as a major blocker of growth and investment, particularly for small and medium-sized enterprises. It's an emotive issue that's has the attention of politicians of all hues. The lack of willingness by banks to engage in lending, which is how the story is broadly articulated, is only part of the story, though. Banks in some countries in peripheral Europe in particular are not in a position to be able to fund their corporate clients. Elsewhere, it's as much the flip side: clients lack the confidence to unleash capital investment programmes in a climate of poor growth and low inflation even if the interest-rate environment is conducive to new borrowing.
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