- Macro-economic policy, it suggests, is at or near the limit in terms of its ability to regenerate confidence – and new financial regulations together with restrictive fiscal policy may be increasing recessionary forces.
- The IMF suggests euro-area credit could drop by anywhere between $100bn (£62bn) and $400bn in the coming years, with the axe falling especially hard on countries already struggling with relatively high interest rates, such as Spain and Italy.
- Europe traditionally depends far more than, say, the US, on bank lending to fuel growth, and Europe’s banks, with their relatively high loan-to-deposit ratios, depend heavily on capital markets for funding.
- According to Standard & Poor’s, in the next five years, the euro area and UK have $8.6 trillion of corporate debt to be refinanced and will also need $1.9 trillion to $2.3 trillion in new finance.
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