The stock of credit to non-financial companies in the eurozone is at its lowest level since early 2008.

Why? (i) anemic supply due to the rise in non-performing loans and banks' conservative strategy; (ii) flagging demand, undermined by the gloomy business climate; and (iii) cost of credit, reflecting dysfunctional monetary policy transmission.

The risk of a credit crunch affects in particular SMEs, which form the heart of Europe's economic fabric. Bank credit is the source of funding for their investment spending.

Restoring the credit channel would bring the recovery forward by several quarters. There is an increasing number of initiatives (EUR 180 billion EIB capital increase; easing of collateral requirements by the ECB, in particular on ABS). The European Commission and the EIB have even proposed contributing EUR 100 billion to 1 million SMEs via the securitization of loans to SMEs and risk pooling.

Ultimately, the eurozone clearly needs a credit policy to make its monetary policy effective and draw up its industrial policy. It would add to the banking union, the fiscal union, and the political and institutional union, still under development.