Cypriot entrepreneurs are at a disadvantage compared to their Eurozone counterparts having to face increased borrowing costs that basically reduce their competitiveness.
And combined with energy costs, the operating costs of small to medium enterprises are significantly affected negatively, Philenews reported on Wednesday.
In about a month’s time, the ECB Governing Council will raise interest rates again, probably by 0.50% and this will be an additional burden on the business environment already facing significant challenges to its survival.
Especially as regards small businesses which are facing accumulated problems.
The latest ECB data is typical of the challenges faced by Cypriot entrepreneurs in terms of increased borrowing costs, resulting in business plans being left on the shelf.
Specifically, the average interest rate in the Eurozone – excluding the latest 0.50% increase that the ECB Governing Council has implemented – for business loans of up to €1 million is 3.69% in the Eurozone and 4.71% in Cyprus with the difference being 1.02%.
In Belgium, the average interest rate offered by banks for the same loan category is 3.57%, in Germany 3.91%, in France 3.02%, in Italy 3.84%, in Luxembourg 3.09%, in Malta 3.93%, in Austria 3.15% and in Slovenia 3.86%.
For the other countries, the average interest rate for loans up to €1 million is 4.52% in Finland, 4.52% in Portugal, 4.40% in Portugal and 4.6% in Lithuania.