by John Galt
May 22, 2012 17:45 ET
In a not so subtle article from the newspaper Adnkronos, the crisis in Italy is far from over and might indeed be accelerating:
Businesses suffering ‘credit crunch,’ report says
This excerpt from the story tells of a tale of woe growing month by month:
Italian businesses are facing a credit crunch,” according to a report by the national statistics agency.
Last year “modest investment activity was accompanied by a growth in the difficulty to access bank credit,” said Istat’s 2012 annual report released on Tuesday.
Italian business confidence in April fell to a 2-year low as a recession causes businesses to close and the rate of unemployment to rise.
Despite extremely low interest rates, banks in Italy and elsewhere in Europe have been reluctant to extend credit to businesses.
In a Reuters article on a report about the Italian banking sector on May 16th, data from the ABI in Italy indicated that business lending as of March was contracting at a 0.7% annualized rate. If this continues to increase and indeed, the credit crunch accelerates, then the anti-austerity movement will have over-achieved their goals of stopping promulgate spending at every level.
At the same time however, the lack of economic expansion and continuation if not outright acceleration of the recession could create a greater risk of default rather than the outcome desired by the very same international bankers who are cutting credit off to Italian business.
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