EU’s Breton Urges Banks to Lend to Businesses Amid Outbreak

(Bloomberg) --

The European Union is urging banks to lend to businesses as the coronavirus outbreak is bound to hit the continent’s economy.

“Banks will have to lend what’s required during this period, with perhaps restrictions a bit less stringent, including their own ratios,” so that small- and medium-sized enterprises in the EU can stay afloat, Thierry Breton, internal market commissioner for the bloc, said during a radio interview on France Inter on Sunday.

Although it’s “too early” to assess the virus’s economic impact, Breton said SMEs face cash-flow problems. “My immediate concern is making sure that SMEs can overcome” this situation, he said, citing the hit to the tourism industry in Europe, which has been losing 1 billion euros ($1.13 billion) a month in revenue due to the drop in Chinese visitors over the past two months.

Breton also said that the European Central Bank has little room for maneuver regarding its capacity to lower interest rates compared with the U.S. Federal Reserve.

He reiterated that Italy’s extraordinary 7.5 billion-euro stimulus measures to cushion the impact of the outbreak won’t be factored in when the EU assesses the country’s compliance with its fiscal rules.

Italy unveiled drastic measures earlier on Sunday to restrict the spread of the deadly virus, which has struck more than 5,800 people so far and claimed the lives of 233. Europe’s fourth-biggest economy is dramatically restricting movement and activity for a quarter of its population in the economic powerhouse that is the region around Milan.

To contact the reporter on this story: Angelina Rascouet in Paris at arascouet1@bloomberg.net

To contact the editors responsible for this story: Andrew Davis at abdavis@bloomberg.net, James Amott, Nick Rigillo

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