NEW figures show that European banks are lending less to companies - another sign the continent's economic upswing remains less than robust.
The European Central Bank reported on Friday that loans to companies slipped by 3.1 per cent in November from a year earlier.
The drop was sharper than the previous month's 3.0 per cent.
Analysts say banks can be reluctant to lend given uncertain growth prospects that mean increased risk they won't be repaid.
Some companies, meanwhile, may not want to risk borrowing, and others don't need credit because they are sitting on adequate cash reserves - but don't yet see a reason to invest that cash in new production.
The economy of the euro currency union - a bloc that grew from 17 to 18 members in the new year with Latvia's accession - expanded by only 0.1 per cent in the third quarter last year, with unemployment at 12.1 per cent.
Governments' efforts to reduce debt by cutting spending and raising taxes have weighed on growth.
Analyst Howard Archer at IHS Global Insight said the weak figures increased pressure on the ECB to add stimulus to the economy in the coming months.
He said the ECB could offer cheap, long-term loans to banks on the condition the money is used for lending.
Analyst Michael Schubert at Commerzbank said that providing such loans could be complex, noting some ECB officials have expressed concern about interfering in banks' market-based decision-making.
Those considerations "suggest that for now the ECB council will remain in wait-and-see mode", he said in a note to investors.
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