By Ian Wishart and Angeline Benoit

Bloomberg News

Don’t ask Victor Duran Naranjo about the European recovery that investors are betting on: His eight-employee software company, based in Spain, still can’t get a bank loan even after revenue rose 10 percent last year.

“In theory, banks are more open. But in practice, it’s not easier to get funding now than in 2009,” he said Tuesday.

Sovereign borrowing costs in Greece, Ireland, Italy, Portugal and Spain fell this month to a euro-area record, according to Bank of America Merrill Lynch bond indexes and the Stoxx Europe 600 Index reached its highest in six years. But declining bank lending and record unemployment tell a different story, as the region struggles out of its longest recession.

“The mood in financial markets may have improved, but the economic situation in most European countries will not improve this year,” UBS AG Chairman and former Bundesbank President Axel Weber told a panel discussion recently at the World Economic Forum in Davos, Switzerland. “After several years of crisis, it’s quite normal to look on the bright side and get excited about improvements. However, it may be a too one-sided view.”

Policymakers in the euro area’s 18 nations are looking to move beyond the debt crisis that started in Greece in 2009 and tore through the currency bloc, focusing on shoring up the banking system.

Still, the recovery remains fragile. The region’s unemployment rate has held at a record 12.1 percent since April. Inflation is less than half of the European Central Bank’s price-stability target. Euro-area government debt will average about 96 percent of gross domestic product this year, according to the European Commission.

Overall, the euro-area economy contracted 0.4 percent last year, according to estimates by the ECB, which forecasts an expansion of 1.1 percent in 2014.

Unemployment in Europe is “still too high,” Nobel laureate Christopher Pissarides, a professor at the London School of Economics, told CNBC in an interview Friday. “One risk for 2014 is that there is deflation in Europe, especially in the south of Europe.”

All that has kept a lid on bank lending to companies and households, vital for generating growth. It shrank for the 19th straight month in November, according to the ECB. Meantime, Stoxx 600’s price-earnings ratio has climbed to its highest since 2009.