EUROPEAN COMPANIES:EUROPEAN BUSINESSES are finding it harder to obtain credit from banks because of the global market turmoil but no European banks seem in danger of collapse, the head of the European employers' association said yesterday.
"Obviously, discussions with banks are now much more difficult. Banks are much more selective in the way they consider extending credit," said Ernest-Antoine Seillière, the president of BusinessEurope.
Mr Seillière was giving his assessment of the impact on the European economy of the upheavals that have forced Lehman Brothers, the US investment bank, into bankruptcy protection and caused mayhem on world financial markets.
"The difficulties of Lehman Brothers are not considered by anyone as showing that there is a systemic crisis," he said.
"From what we hear in Europe, there is no bank that is considered to be in a dangerous situation. We're confident that the European banking system is not threatened by what's happening in the US and spreading throughout the world."
He said if an important European bank with cross-border activities were to fall into difficulty, it would be vital for European Union regulators to ensure there was an EU-wide response.
"The idea that it would be dealt with only by the country where the bank is based is not realistic. There would need to be very strong co-ordination," he said.
Mr Seillière said that had it not been for the latest market turbulence that began in August last year, companies that are members of BusinessEurope would have said the European economy was on the brink of recovery.
"Our members do not consider the situation is that pessimistic," he said.
The sharp decline in oil prices and in the euro's external exchange rate since mid-July offered hope that Europe's growth would gather strength by the end of this year, he said.
The euro zone suffered a 0.2 per cent drop in growth in the second quarter of this year, its first such fall since the euro's launch.
"Two main factors driving the slowdown in Europe over the last year or so are [the reduction in] construction investment and private consumption," said Marc Stocker, director of economics at BusinessEurope.
