Tuesday, April 30, 2013

30/4/2013: German credit keeps flowing to firms... & still there's no growth

Per German Ifo institute: " Credit constraints for German trade and industry edged downwards by 0.1 percentage points compared to March. Around a fifth of the companies surveyed reported a restrictive credit policy on the part of banks. Despite recent developments in the euro crisis, there have been no significant changes in the favourable financial environment of German companies.

"After last month's decrease, credit constraints for large and small firms rose again, with the latter experiencing the sharpest increase of 1.3 percent. Medium-sized companies reported an easing of credit constraints."

So things are going swimmingly in terms of credit for German enterprises. Ease of getting credit is about as good as 2005-2007 average - the years when German banks were not just lending with abandon to domestic enterprises, but were also funding massive property booms in Spain and Ireland... yet, for all the credit access, German growth is... tanking.

So much for the Irish (and other governments') thesis that if only credit flows were improved, growth will return...
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