German companies battling for credit

Source: Agencies  |   2008-12-31  |     NEWSPAPER EDITION

COMPANIES in Germany are finding credit from banks ever harder to come by as the global financial crisis deepens its hold on Europe's biggest economy, with larger manufacturers particularly feeling the pinch, according to a new survey released yesterday.

The survey of 4,000 companies in trade and industry by the Munich-based Ifo economic institute found that 39.9 percent classed banks' willingness to lend to businesses as "restrictive" this month, up from 35.2 percent in November and 28.7 percent in August. It found that large manufacturers were particularly hard hit, with 47.6 percent complaining of restrictive lending ?? compared with 40.1 percent a month earlier and just 17.3 percent in August.

Large firms had long had the best access to credit but "are now encountering credit constraints more often, evidently because they are particularly reliant on the larger private and state banks, which have been most affected by the financial crisis," Ifo president Hans-Werner Sinn said in a statement. "The credit crunch in Germany is drawing closer," he added. Ifo found that small manufacturers' situation was relatively little changed. The German economy fell into recession in this year's third quarter.