Amid much political chatter about the economy getting better, tactically being emphasised just as the country needs full international support for its exit from full Troika control, the situation in the high street and at industrial units across Portugal tells a different tale.
The percentage of companies with overdue loans rose in March to 31%, the highest rate since December 2009, according to data released on Wednesday by the Bank of Portugal. This will be a huge disappointment to Pires de Lima, the Minister for the Economy, whose political ascendance is linked to the country’s economic growth.
Small and Medium Enterprises (SMEs) are the sector hit hardest with overdue loans rising marginally from 30.8% to 31.1%. This also is the sector that employs the most workers and an inability for the SME sector to pay the bank, despite the inevitable draconian chain of events that are enforced on default, suggests an underlying malaise not referred to in headline-grabbing snippets from Passos Coelho’s cohort.
The percentage of large companies with overdue loans has improved, decreasing to 16.7% in March from 17.4 % in February. Larger companies are often in a better position to renegotiate and reschedule, SMEs often are at the whim of banking policy.
For hard hit families, those with mortgage arrears rose in March to 6.4% from 6.3% in February, the highest in ten months. Consumer credit and other personal loans in arrears increased to an unsustainable 17% as financial misery continues to occupy and upset the minds of a public. The government is at the end of a loan process involving a total indebtedness to the Troika equivalent to €7,000 for each citizen.
Portugal’s banks are still hoarding, not lending, despite exhortation from central government. Capital ratios have improved at the expense of SMEs and house owners. Loans are called in at the smallest sign of trouble especially when there are assets backing the loan agreements.
Comments
This is nothing at all to do with tax rates .... everything to do with genes.
One of the odd attractions of paying a public sector is that there is a portion of the workforce that is paying tax -because we, the Governement, is paying them. (However - at less than the amount needed to pay for itself !!)
Certainly the cheaters, fraud, corruption, general dishonesty, lack of moral fibre, bent politicians etc needs expensive inspectors - but many of them seem just as bendable. So needing even more expensive inspectors of the expensive inspectors !
Send in the Scandinavians to run this place .... Isaccsons, Hendriksons, Magnusson - anybody with son in their name would be OK to most Portuguese.
Just imagine if I'd been born Williamson - I too would be able to bang heads together here !