One Currency, One Policy Rate, and 238 Basis Points Between Irish and Luxembourgish Firms
Silver Data Lab Research Desk · Statistical analysis · Published on 04 August 2026
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- Data source
- European Central Bank
- Reference period
- July 2026
- Last updated
- 03 September 2026
Key estimates
- A business borrowing in Ireland pays 5.35% on a new loan; one borrowing in Luxembourg pays 2.97%.
- That is a gap of 238 basis points between two countries using the same currency, under the same policy rate.
- The euro area average is 3.72%. Thirteen of the eighteen countries with data sit above it and five below.
- Estonia at 5.21% and Lithuania at 4.83% are the next most expensive after Ireland.
- The four largest economies — Italy 3.79%, Germany 3.78%, France 3.61% and Spain 3.68% — all sit within 11 basis points of the average.
- Which countries file a figure changes from month to month, and the spread moves with it: the same measure was 169 basis points in June, a month in which Luxembourg reported nothing.
The same money at different prices
The ECB sets one policy rate for the whole euro area. What a firm actually pays to borrow is set by its bank, and banks price differently depending on where they are.
In July 2026 a non-financial company taking out a new loan paid 5.35% in Ireland and 2.97% in Luxembourg. Both firms borrow euros. Both sit inside a single monetary union whose central bank has, since June 2026, held the deposit rate at 2.25%. The difference between them is 238 basis points, and it is not explained by the currency, the policy rate, or the exchange rate, because all three are identical.
Where the expensive money is
Ireland is the most expensive, followed by Estonia at 5.21% and Lithuania at 4.83%. Slovakia records 4.56%, and Bulgaria, in its first year inside the euro area, 4.15%.
What the dearest markets have in common is size. They are small banking markets, and a small market supports fewer lenders. Where a borrower has three banks to approach rather than thirty, the price of credit reflects that.
The cheapest money is in Luxembourg at 2.97%, the Netherlands at 3.22% and Croatia at 3.53%. Luxembourg is a small market too, which is enough to show that size alone does not order this ranking.
The large economies cluster
Italy records 3.79%, Germany 3.78%, Spain 3.68% and France 3.61%.
All four sit within 11 basis points of the 3.72% average, in a distribution 238 basis points wide. This is arithmetic rather than coincidence: the euro area average is weighted by lending volume, and these four countries account for most of the lending. The average describes them because they largely are the average.
It follows that the average is a poor guide to what a firm outside those four economies pays. A Lithuanian company is 111 basis points above the figure usually quoted as the euro area cost of borrowing.
Reading the spread means reading the sample
The distance between the most and least expensive country was 214 basis points in June 2022, before the tightening cycle began, 289 at the September 2023 peak in ECB rates and 259 in June 2024. In July 2026 it is 238.
Those figures do not form a clean series, because the countries behind them are not the same countries. Not every euro-area member files a rate every month: eighteen do here, and Finland, Latvia and Malta do not. Luxembourg is the case that decides the number, because it has been the cheapest country in the euro area in twenty-three of the twenty-four months it has reported over the last three years. Across those same months the spread has a median of 250 basis points where Luxembourg appears and 193 where it does not.
June 2026 was a month without Luxembourg and measured 169 basis points. July is a month with it and measures 238. Set side by side, those two numbers describe a change in who reported at least as much as a change in the cost of credit. Restricted to the seventeen countries that filed in both months, the spread went from 169 to 213 basis points.
What the series supports is the level rather than the direction. A firm in Ireland paid 213 basis points more in July than one in the Netherlands, and both borrow the same currency at the same policy rate.
What this study does not establish
It records what firms pay, not why. Bank concentration, credit risk, collateral practice, the mix of loan sizes and maturities behind each national average, and the health of local bank balance sheets all plausibly contribute, and this data cannot separate them.
The measurement is what matters here: a single monetary policy does not produce a single price for credit, and in every month of the last four years the distance between the cheapest and dearest euro-area country has been at least 137 basis points.
Interest rate on new business loans, July 2026
| Country | % per annum | Gap to Euro areapercentage points, derived |
|---|---|---|
| Ireland | 5.35 | +1.6 |
| Estonia | 5.21 | +1.5 |
| Lithuania | 4.83 | +1.1 |
| Euro areaaggregate | 3.72 | — |
| Croatia | 3.53 | −0.2 |
| Netherlands | 3.22 | −0.5 |
| Luxembourg | 2.97 | −0.7 |
What these figures cannot tell you
- Three euro-area countries are missing
- Finland, Latvia and Malta report no value for July 2026 in this series, so eighteen of the twenty-one euro-area countries are covered. The extremes and the spread are computed across those eighteen only.
- The reporting countries change from month to month
- Which members file a rate varies by month, and the spread is the distance between two of them. Luxembourg has been the cheapest euro-area country in almost every recent month it has reported, so a month in which it files and one in which it does not are not directly comparable. Spreads quoted here for different months rest on different country sets, and the like-for-like comparison in the text is computed by Silver Data Lab rather than published.
- A national average hides its composition
- Each country figure is an average across new loans of every size and maturity. A country whose lending skews towards small, short, unsecured loans will show a higher rate than one whose lending skews towards large secured facilities, without any bank charging a different price for the same product.
- This is new business, not the outstanding stock
- The series covers loans agreed in the reference month. It says nothing about what firms pay on loans taken out earlier, which for fixed-rate borrowing may differ substantially from current market conditions.
- The average is volume-weighted
- The euro area figure of 3.72% weights each country by lending volume, so it is dominated by the largest economies. It is not the average of the twenty-one national rates, and no country need be at it.
- Prices, not causes
- The data records the rates charged. It does not attribute them to bank concentration, credit risk, collateral or any other factor, and no causal claim is made here.
Frequently asked questions
- Why do businesses pay different interest rates in different euro-area countries?
- Because the ECB sets the policy rate but commercial banks set lending rates. In July 2026 the spread between the most expensive country, Ireland at 5.35%, and the cheapest, Luxembourg at 2.97%, was 238 basis points. This study records the difference; it does not attribute it to any single cause.
- Where is business credit most expensive in the euro area?
- Ireland, at 5.35% on new loans to companies in July 2026, followed by Estonia at 5.21% and Lithuania at 4.83%.
- What is the average business lending rate in the euro area?
- 3.72% in July 2026. That figure is weighted by lending volume, so it is dominated by the largest economies — Germany, France, Italy and Spain all sit within 11 basis points of it — and is a poor guide to what a firm in a smaller member state pays.
- Is the gap between countries getting wider or narrower?
- The series does not answer that cleanly, because the countries reporting change from month to month. The spread was 214 basis points in June 2022, 289 in September 2023 when ECB rates peaked, 259 in June 2024, 169 in June 2026 and 238 in July 2026 — but Luxembourg, the cheapest country in almost every month it files, is absent from some of those months and present in others. On the seventeen countries reporting in both June and July 2026, the spread went from 169 to 213 basis points.
- Which countries are missing from this comparison?
- Finland, Latvia and Malta, which report no value for July 2026 in this series. Eighteen of the twenty-one euro-area countries are covered.
Methodological note
The ECB publishes MFI interest rate statistics through the ECB Data Portal. This study uses the rate on new business loans to non-financial corporations, all maturities and all loan sizes, as published, for July 2026 — the most recent month available at extraction.
Every euro-area country reporting a value for that month is included; Finland, Latvia and Malta report none.
The 238 basis point spread, the counts above and below the average, the observation that the four largest economies all sit within 11 basis points of it, and the historical spreads for June 2022, September 2023 and June 2024 are derived by Silver Data Lab from the published series by taking the difference between the highest and lowest national rate in each month. The euro area aggregate is the published figure, not a computed one.
The comparison between months is derived the same way and rests on the same series: how often Luxembourg has been the cheapest reporting country, the median spread in months with and without it, and the spread restricted to the seventeen countries filing in both June and July 2026. None of those figures is published by the source.
The ECB policy rate quoted for context is the deposit facility rate from the companion study on this site.
Source data
The underlying series can be inspected and re-downloaded from the ECB Data Portal. The filters below are the ones applied.
MFI interest rates on new loans to non-financial corporations
MIR/M..B.A2A.A.R.A.2240.EUR.N
- Filters applied:
- freq=M · ref_area=all euro-area countries and U2 aggregate · bs_rep_sector=B · bs_item=A2A (loans other than revolving loans and overdrafts) · maturity=A (total) · data_type_mir=R (annualised agreed rate) · amount_cat=A (total) · bs_count_sector=2240 (non-financial corporations) · currency=EUR · ir_bus_cov=N (new business)
- Extracted:
- 2026-09-03
- Source last updated:
- 2026-07-01
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