MORE ON THE CREDIT CRUNCH IN SPAIN

Based in the small town of Esquivias south of the capital, Guitarras Manuel Rodríguez and Sons turns out more than 5,000 handcrafted flamenco and classical guitars every year, along with a small range of other wooden instruments. Despite the emphasis on tradition and craftsmanship, this is a capital-intensive business. The work floor is dotted with heavy machinery.

Starting a company such as this, says co-owner Manuel Rodríguez, would be almost impossible in Spain’s current economic climate: “If you go to a bank today, no one will give you credit. And even if they gave you credit, they would demand a big deposit and would demand eight or 10 per cent in interest”. Similar complaints can be heard in small and midsized businesses up and down the country, and are raising concern not just within the Spanish government but within the European Central Bank in Frankfurt.

In the five years since the crisis started, no fewer than 450,000 small and medium-sized enterprises have gone under, says Jesús Terciado, the president of Cepyme, the Spanish association. Researchers at Deutsche Bank, meanwhile, point out that last year almost 20 per cent of all loan applications by Spanish SMEs were rejected – twice as many as for large corporations. 

Source. Tobias Buck. “Spain threatened by resurgent credit crunch”, Financial Times, 4 April 2013.

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