Business lending is braking sharply across Europe, but the contraction is strongest in Italy, where the decline in August hit an all-time high (-6.4 percent) since the ECB has been providing data, i.e., since 2004. The fall is linked to lower business demand, tighter conditions at banks and the ECB's monetary tightening. The numbers make a recession in the Eurozone more likely. Not even after the spread crisis had the reduction been so large: the negative peak was reached at -6.1 percent in November 2013. In a single month, loans fell by 15 billion euros. Italy's figures are worse than those of Spain (-3.5 percent in August), Germany (+1.7 percent) and France (+4.1 percent). In the Eurozone as a whole, business loans rose 0.6 percent (from +2.2 percent in July), a figure not seen since late 2015. Even more significant was the annualized three-month change in corporate lending: -11.2% in Italy, -4.4% in Spain, -1.5% in Germany, +2.7% in France. As for loans to households, the Eurozone figure shows growth of 1 percent in August, from 1.3 percent in the previous month. Italy with -0.6% did worse than average in this area as well.
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