Spain’s Property Purge No Panacea for Loan Drought: Euro Credit
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Spain’s bid to unblock the flow of credit to its economy by imposing 50 billion euros ($66 billion) of charges on banks for their real estate may not be enough to make them lend and persuade consumers to borrow.
“Everyone I speak to in the banking world tells me the same thing, which is that there is no solvent demand for credit,” said Edward Hugh, an economist and board member of CatalunyaCaixa, a banking group seized by the Bank of Spain last year. “The underlying problem is that there is no growth horizon for Spain.”