ECONOMY

EU pondering guaranteeing loans made to companies

The European Union may guarantee the repayment of bank loans made to companies in an effort to improve firms’ access to credit, especially in southern Europe, European Commission President Jose Manuel Barroso said on Wednesday.

Easier access to credit is critical to getting Europe’s economy growing again, with even record-low interest rates failing to translate into an increase in lending.

The main challenge is to inject life into the six shrinking southern European economies – Greece, Cyprus, Italy, Portugal, Spain and Slovenia – since they will never be able to pay back their large debts without growth. [Reuters]