"Credit is contracting rapidly in Italy and Spain." The IMF is sounding the alarm. Credit to SMEs is a "priority" and can also be improved by reducing government back payments, as decided by Italy with the allocation of 40 billion euros.
"Credit to SMEs is contracting rapidly in Italy and Spain" affirms the IMF, specifying that if on the one hand the demand for credit is contracting due to macro-economic uncertainties, "on the other hand any restrictions in the supply of credit must addressed as a priority”. In the countries of the periphery of the euro area, credit has fallen by 5% since the beginning of the crisis, "starving small and medium-sized enterprises and blocking economic recovery".
The flow of credit to small and medium-sized enterprises needs to be improved and SMEs' credit difficulties must be a priority to ensure that the financial system is capable of facilitating economic recovery. According to the IMF, one of the avenues to be pursued is to reduce government payments arrears. Italy - highlights the IMF - has announced an initiative to speed up the payment of 40 billion euros in arrears.
Meanwhile, the Bank of Italy in the Economic Bulletin observed in this regard that “we need to continue with effective and credible economic policies, which interrupt the recessionary spiral underway in our country almost continuously since 2008; it is necessary to prevent uncertainties in the domestic situation and the re-emergence of turbulence in the euro area from threatening the prospects for recovery”.
