(2009), Fiscal Policy with Credit Constrained Households, European Economy Economic Paper No 357 and ECB Monthly Bulletin Box (2012), Fiscal multipliers based on the ECB’s New Area-Wide Model, December 2012, pages 83–85  11  See Reinhart C., V. Reinhart, K. Rogoff (2012), Public Debt Overhangs: Advanced-Economy Episodes since 1800, Journal of Economic Perspective, 26(3), pages 69–86, and Checherita-Westphal C., P. Rother (2012), The impact of high government debt on economic growth and its channels: an empirical investigation for the euro area, European Economic Review, 56, pages 1392–1405. 12  See De Fiore F., H. Uhlig, 2011, Bank Finance versus Bond Finance, Journal of Money Credit and Banking 43, pages 1399–1421. BIS central bankers’ speeches  5  alleviated the funding constraints of banks extending loans to SMEs by accepting such loans, and asset-backed securities (ABS) backed by pools of loans, as collateral in its monetary policy operations. The Banco de Portugal has been proactive in implementing these measures. Additional credit claims alone account for around 15 percent of total collateral posted by Portuguese banks with the ECB, and help to generate a large collateral buffer. The ECB will support a revival of the ABS market in the euro area, which would help SMEs to benefit from the improving financing conditions. Let me also point out that the restructuring and strong capitalisation of banks is an important condition for restoring the smooth provision of credit to euro area corporates and households.
In countries where the banking sector has experienced large balance sheet shocks related to deteriorating sovereign debt, access to bank credit has tightened substantially. Elevated risk premia in the stressed countries have in turn had repercussions on access to finance, in particular for SMEs. In contrast, large corporations can resort to corporate debt instead of bank loans, especially during financial crises, or to foreign loans instead of domestic loans in the case of large multinationals, as happened, for instance, in Ireland.12 SMEs employ around three-quarters of the euro area’s workforce and they generate around 60% of its value added. Their restricted access to finance in a number of euro area countries is clearly a threat to economic recovery. A number of governments, including Portugal’s, are implementing measures to support the financing of SMEs. We see these measures together with the use of EU financial instruments (EIB and EU structural funds) as very important in unlocking access to funding and investment growth. The ECB has  9  See Blanchard O., D. Leigh (2012), Global Forecast Errors and Fiscal Multipliers, IMF Working Paper No 13/1. 10  See Roeger W., in ‘t Veld J.