Businesses in the Eurozone face negative interest rates in 10 European markets, according to the latest data from Raisin.
Raisin, which provides a marketplace for those looking to source the best bank deposit rates, compiles a monthly tracker, looking at rates across Europe, for both retail investors and corporations.
Companies now face the lowest interest rates in the Netherlands, with the average corporate bank account paying a negative rate of -0.43 per cent. Germany is just behind, with an average rate of -0.42 per cent.
These low rates are compounded by the spectre of rising inflation, giving many European businesses and investors the jitters.
These figures have continued to fall month on month, with the average corporate deposit rate in Germany slipping from -0.37 per cent in January.
Corporates in Austria, Italy, Ireland, Sweden and Denmark are also paying negative rates on average.
Given these low rates there seems little escape from inflation, although Malta offers some potential relief, with an average corporate rate of 0.69 per cent. Raisin says there are also options in the Baltics and easter Europe.
Raisin CEO and co-founder Dr Tamaz Georgadze says: “According to to the European Central Bank’s consumer survey ‘ECB listens’, Europeans have begun exhibiting deep financial pessimism after a decade of low and still falling interest rates.
“The study reveals widespread frustration about low rates, along with intensifying fear of inflation, particularly vis a vis real estate prices. This anxiety and pessimism tracks with Raisin’s own findings in a representative Europe-wide survey of attitudes on interest rates, conducted in March 2020. The long-term pessimism itself in locked-down Europe casts a shadow over the economic outlook.”
He adds: “While the ECB defends the economic effectiveness of low rates, and inflation targets of 2 per cent have their merit, Europeans still need to to reach at least basic financial goals like securing their retirement. Beyond needed public policy measures, there are two gaps that need to be filled to fend off this dangerous pessimism and make sure they can continue to work toward such goals.
“One is a financial awareness gap, evidenced by Europeans leaving such staggering sums of cash on their current accounts earning no interest, losing billions of euros in potential wealth. The other is a digital access gap, between the current reality and Europe’s aspiration to a single market – which, when realised, will enable better digital banking and bring the benefits from cross-border offers and hurdle-free online access.”
