jamessaft1(James Saft is a Reuters columnist. The opinions expressed are his own)

Europe’s experiment in borrowing from Peter to pay Peter argues for a slow economic recovery with a low ceiling.

Data released by the European Central Bank on Monday showed that the supply in money is growing at best haltingly and that loan growth to euro zone households and businesses is at its lowest since records began.

Annual loan growth to the private sector slowed to 1.5 percent in June from 1.8 percent in May while the broader measure of money supply growth hit 3.5 percent.

Loans to non-financial corporations grew at a 2.8 percent annual rate, and actually fell from May. Household lending wasn’t that peppy either, with the growth rate falling to a paltry 0.7 percent annual rate.

Banks in Europe aren’t lending to consumers and businesses for a really sound set of fundamental reasons — borrowers know they ought not to be borrowing and the banks know that, of those who are asking for money, a disturbing minority can’t be trusted.