CREDIT NOT GETTING THROUGH

PALMA
THE President of the Confederation of Balearic Business Associations, Josep Oliver, yesterday complained that, despite the government and local financial bodies having agreed last month to make credit more available to struggling businesses, in many cases banks are still refusing to release funds forcing some companies into bankruptcy.

Oliver explained that many banks are still asking businesses to prove they have collateral before agreeing to lines of credit which, in many cases, are vital to guarantee the future of the business and its employees.

Oliver yesterday held a meeting with the mayor of Palma, Aina Calvo, to express his concerns.
He said that while the banks are continuing to ask the same of their business clients than they did a year ago “many businesses are not the same as they were a year ago.” That said, Oliver explained “banks are not lending money because their clients would probably not approve of their funds being loaned out to businesses with no collateral or guarantees to return it.” He added that the lack of credit has also led to the fall in spending and the slow down of the economy and one solution would be to have a more European labour market which would enable employers to be more flexible.