While they are "discussing" what to do, everybody sees what happens. When they finally decide what to do who are they going to help?
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Ricard Mollon, founder of a designer furniture firm near Barcelona, says he can see the way to success but can’t get a bank loan to fund it.
“It’s a vicious circle: To obtain money, you have to show results first,” the 32-year-old said in an interview. With Spain’s banks lacking capital and burdened with bad debts, Mollon said he expects no help from them to fund marketing and expansion at his firm, Quattria S.L. “They won’t pay attention to us as a small company.”
For two months, European Central Bank policy makers have discussed ways to help entrepreneurs like Mollon access funds they need, even as the region endures its longest-ever recession. While ideas range from a limited tweak of collateral rules to packaging small-business loans for investors, ECB officials, including President Mario Draghi, are now hinting little can work unless banks unload their toxic legacy debt.
“Probably more efficient than any measure to support lending is to start the cleaning of banks’ balance sheets,” said Laurence Boone, chief European economist at Bank of America Merrill Lynch in London. Still, “allowing long-term investors to take a stake in SME funding I think in spirit is positive. It makes sense if we want the economy to start accelerating again.”
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