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Report: $1 trillion bad loan pile hangs over Europe

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Report: $1 trillion bad loan pile hangs over Europe

The value of bad loans in Germany and France has reached almost €230 billion, a figure close to that in Italy, which demonstrates the pan-European scale of the bad debt problem, Reuters reported Oct. 13.

After Italy, where the aggregated bad loan portfolio stood at €262 billion, the highest value of loans overdue for roughly three months was seen in France (€160 billion), Spain (€139 billion), Greece (over €100 billion), Germany (€68 billion) and the Netherlands (below €50 billion), Reuters said, citing European Central Bank data for the first quarter.

When the percentage of bad loans is taken into account, the situation is worst in Greece, with bad loans constituting almost half the total loan volume. In Italy and Ireland, problem loans constitute around one eighth of the total portfolios, while in France the proportion is less than 4%, the news report said, quoting the European Banking Authority.

Attempts by the ECB to deal with Europe's $1 trillion in bad loans have met with opposition from German and French members of the European Parliament, and the issue is becoming one of the greatest challenges for the central bank, the newswire noted.