Spanish SMEs pay the higher interest rates of the past four years at the time of borrowing, while the cost for German companies is at historic lows, according to financing costs for families and businesses in the euro zone published on Monday by the ECB.
This trend puts markedly divergent increasingly southern European companies at a competitive disadvantage to rivals in Northern Europe.
“We all know that financing costs are falling in the north and up into southern Europe. If we consider loans of between 1-5 years and in amounts below 1 million euros (typical small business), we see the Germans are funded at 4.04%, the French to 4.14%, while the Italians do to 6.18% and 6.5% for Spaniards. This comes to justify the intervention of the ECB because of the state of fragmentation of the European market,” explains analyst at Barclays Alberto Vigil.
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