News Summary: Eurozone business loan market tight

News Summary: Loans to eurozone businesses shrink as banking system struggles

Associated Press

BUSINESS LENDING DIPS: Bank loans to non-financial businesses in the eurozone fell 3.8 percent in August after a 3.7 percent drop in July, raising pressure on the European Central Bank to take steps to make more credit available and keep a fragile recovery going.

TIGHT TIMES: Credit is tight, particularly in struggling countries like Spain and Italy, because banks are still cautious about lending and companies are cautious about borrowing in an unsteady economy.

ECONOMIC EFFECT: The ECB has warned that lack of affordable credit for small and medium-sized companies in some parts of the eurozone is holding back growth. The economy in the 17-country euro currency union grew a slim 0.3 percent in the second quarter.

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