THE POWER OF FIRE OF COUNT IS NOW CLEAR: credit data are disappointing

The data of the Bank of Italy and the ECB show more and more how Conte's announced "Firepower", the 400 billion promised as "Maneuver never seen before in Italy", are only a sort of chimera.

Let's start by considering the ECB's latest bulletin, which analyzes credit data at European level until April. If we look at these data, we see that Italy is practically the last in the growth of credit towards the private sector.

On the left are the loans granted to businesses, and we see how growth is asphyxiated, indeed Italy has been far exceeded by Spain. To be precise, growth is close to 2% against the abundant 5% of the euro area average and almost 10 in France and Germany. So if the two leading countries of the Union have indeed expressed their firepower, Italy has fallen powerfully behind. On consumer credit there is a drop everywhere, but almost imperceptible in Germany, yet even this sector, if well guided, would have allowed it to support domestic demand and make the Covid-19 strike less hard. Instead nothing.

In the following graph we see, for the European average and for the main countries, what the influence of a series of factors on the credit trend has been. If this didn't grow as it should have, why did it happen?

If we consider Italy (green line) we see how, alongside the structural factors (General economic outlook), the individual companies (firm specific outlook) and general capitalization (Firm's own Capital), which have a trend common to the main European countries , there are three factors that weighed most on Italy and the lack of credit development:

  • the credit history of the company, which often does not favor our small and medium-sized companies, emerging from a heavy crisis;
  • the willingness of banks to lend, which is actually less;
  • access to public financial support, which is less for us, even surpassed by Spain. In the face of firepower:

If we then analyze the data provided by Giuseppe Liturri for StartMag we have an even worse picture. Analyzing the data provided by MEF, BI, SACE, and Mediocredito centrale, we are presented with a picture of unbelievable splitting which does not predict anything good.

Bank of Italy talks about financing requests "received" by banks for access to the Guarantee Fund for SMEs (946 thousand for a loan amount of over 63 billion), but this does not mean that the loan has been granted. Indeed, the loan stops at 80% of the requests relating to 100% guaranteed loans, a good 659 thousand in number, but a very small value, 13 billion, just over 19 thousand euros per loan. The small, very small, entrepreneurs have borrowed the very necessary to survive while remaining far from the promised 25 thousand euro ceiling. Another significant factor is that of the applications received by the Guarantee Fund from Mediocredito Centrale by the banks. We learn that of the 742 thousand applications (for loans of about 43 billion, average 57 thousand euros on loan, very little in the light of a relaunch) received by the Fund, about 733 thousand were accepted, but nothing is known about the actual disbursement. It is only known that, in the end, the total disbursement, according to the ECB, is around 23 billion. Other than 400 billion of the "Firepower", it was actually four dollars, which come late. Entrepreneurs have also been very cautious about uncertainty about the future and the fact that this situation does not guarantee any security. This is perhaps the biggest failure of the Conte government: not having ensured a security perspective that would entice you to invest. Without protection nobody risks.

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The article L'IMPOTENZA DI FUOCO DI CONTE IS NOW CLEAR: the credit data are disappointing comes from .

This is a machine translation of a post published on Scenari Economici at the URL on Sun, 05 Jul 2020 16:53:10 +0000.