European governments have injected their economy with substantial amounts of liquidity during the financial crisis, but the funds have not necessarily made their way into the wider market. The situation explains why credit quality in Europe likely will continue to be strained next year. Small and midsize enterprises are expected to be particularly hard hit. "The unrated universe of SMEs is, in my view, one of the real vulnerabilities for 2010," said Blaise Ganguin of Standard & Poor's. "They are caught in the crossfire of short-term refinancing structures and [the fact that] banks are maintaining very tight lending standards."

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