The collapse of credit alarms banks and instigates business activism
Companies stop asking for loans and employers prepare pronouncements
Alarm in the Spanish banking . And, chained, in the business hierarchy and in government ministers in office. The demand for credit has plummeted for several months, and this has been transmitted by the heads of the entities to the acting ministers of the economic team of Mariano Rajoy, Luis de Guindos, Economía, and Cristóbal Montoro, of the Treasury and Public Administrations . The latest closed data of the banking sector available, those of the closing of the month of July, confirm that fall in demand.
As shown in the table that accompanies this information, the volume of new credit granted by Spanish financial institutions fell by 28% compared to the same month of the previous year, when it rose by 43%. But that drift has been occurring since last March, with falls ranging between 51% and 33%.
The drop is relevant in the case of mortgages, although only since July, and still not in the consumption of families, a factor that together with tourism and exports are the basis for the latest records of the recent growth of the Spanish economy . But the most worrisome item, and one that will have the greatest impact in the future, is that of the loans of more than one million euros from the companies, concentrated above all in SMEs. The banks say that “the business demand for credit has practically disappeared”.
In September, this negative trend that began in March has been maintained, according to the leaders of several financial entities consulted this last week by this newspaper. In this observation there is unanimity. The Spanish market is led by la Caixa, chaired by Jordi Gual; the Santander, directed by Ana Botín, and the BBVA, headed by Francisco González.
The doubts appear when it comes to identifying the causes of the practical disappearance of new requests for bank financing. It should be borne in mind that in the Eurozone as a whole the trend is similar also since March, although less pronounced than in the Spanish case, and has also worsened since July.
The explanations accumulate. From the policies – the Brexit, the Spanish parliamentary blockade after the 20-D and the 26-J, the crisis of the European project and the clouds that hover over relevant countries like France, Italy, and, more recently, Germany – until the economic – weak European growth, the decline in international trade that has affected large customers of Spanish companies, especially Germany.
In the case of mortgages, whose decline began in July, some bankers point to the “superficiality of the recovery, which translates into low wages and precarious contracts, while the entry of foreign capital into the real estate sector and tourism demand they have pushed property prices up prematurely, putting them out of the reach of the majority. “
Among the economic elites this evolution has triggered all the alarms. In the first place, among banks, which due to their previous difficulties, low interest rates, high delinquency and a credit portfolio with little or no financial margin must now add the general collapse of credit demand.
In the case of business organizations, their interpretation is more political. From CEOE and Foment del Treball is attributed equally to the Spanish political paralysis and the European crisis a situation of “uncontrolled expectations, in which there are no investments, beyond those of mere maintenance”
Informed of the movements of the great parties, especially of what happened during these convulsive days in the PSOE, they have kept silence, conscious of the social rejection that the pressure of the economic groups provokes. Last Wednesday, the business leaders celebrated the movements against Pedro Sánchez, although later they had to lower expectations.
However, as it approaches October 31, which marks the parliamentary limit to elect a new government before sliding into the third elections, the CEOE and Foment del Treball leaders raise debates and even public pronouncements.
Tomorrow, the Catalan employers hold the monthly meeting of its board of directors, and its president, Joaquim Gay de Montellà, could demand an agreement to avoid new elections, pending what happens this weekend with the crisis of the Socialists, although without public announcement.
In the case of the CEOE, the great Spanish business organization, chaired by Juan Rosell, its board is convened for the next day 19. And, according to sources close to the organization, it is expected to issue a public resolution if at the time of To celebrate the meeting had not reached an agreement for the formation of a government led by the Popular Party.