Higher credit costs for businesses in southern Europe 'unacceptable', says Council of Europe
Higher credit costs for businesses in southern Europe 'unacceptable', says Council of Europe
COMPANIES in southern Europe having to pay far more than those in the north to get finance is 'unacceptable', says Herman van Rompuy, president of the Council of Europe.
He has called for the Central European Bank (BCE) to 'take more committed action' to stop this discrimination and make it easier for small and medium-sized companies (SMCs) to obtain credit in accordance with the Spanish government's request.
“Restrictive credit conditions mean recovery is a huge upheaval which affects smaller firms to a much greater degree,” stated Van Rompuy yesterday (Thursday) at a conference in Estoril (Portugal) which was broadcast internally at the EU offices in Brussels.
“It is much more expensive today for a company in Portugal, Spain or Italy to take out a loan than for a very similar firm in Austria or Belgium – this is unacceptable, and it is clear that something has to be done.”
Van Rompuy says that although national governments can help, as can the European Investment Bank, “the crux of the problem is in the financial fragmentation between member States, which is putting some of the key achievements of Europe in jeopardy.”
He called for the BCE to work with heads of State and other EU organisations in order to reach 'more decided and intelligent' solutions, stressing the importance of this teamwork since 'the BCE cannot and should not have to bear the burden of resolving all Europe's problems by itself'.
Commenting that a balance should be struck and a gradual approach taken when attempting to reduce State deficits, the Council of Europe president said: “After three years of sacrifices, understandably, people's patience in southern European countries is running out and they are getting weary of constant 'reforms'. Governments now need to focus on structural measures to bring about long-lasting improvements to the economy, and urgently need to take more steps to revive growth and fight against unemployment.
“We will revisit this issue at the Council of Europe in June, during which I shall propose additional measures for immediate action in terms of growth and employment, aimed particularly at young people.”
