The credit market has been in a comatose state since March, when the disbursement of new loans started to nose-dive and demand for new loans plunged to historic lows.
Banking officials stress that lingering uncertainty regarding the outcome of the SYRIZA-led government’s negotiations with the country’s international creditors has paralyzed the market and had a negative effect both on public sentiment and the business world.
The same sources warn that the situation is getting worse every day that the talks drag on, pointing to data that illustrate the point.
In April, the repayment of older loans outstripped the issue of new ones, with the net flow of loans to households and enterprises amounting to a negative 542 million euros. In March the balance stood at minus 639 million euros, reversing the positive trend seen at the start of the year: In January the net flow of funding to the private sector was at minus 95 million euros and in February it was at plus 75 million.
As far as corporate funding is concerned, the picture was particularly positive in the first couple of months of 2015, as the net flow of credit to companies stood at a surplus of 328 million euros in January and 433 million in February. In March the flow to companies reverted to negative territory (by 303 million) and in April it was at minus 261 million euros.
Banking officials say that the positive picture of the first two months of the year was due to the momentum generated in the first half of 2014 and strong expectations that the country was on its way out of the crisis. They note that the increased disbursements of corporate loans in January and February concerned applications submitted last fall, when the conditions in the economy and the market were entirely different. This has changed dramatically since late 2014, first due to the political uncertainty ahead of the general election and then to the lack of progress in talks between the SYRIZA administration and Greece’s creditors.