The recent green shoots emerging out of the euro zone economy could look a little more leafy on Thursday when data is likely to show a long-awaited recovery in private bank lending is starting to pick up pace.
The head of euro zone finance ministers urged Greece on Monday to “stop wasting time” and buckle down to serious talks on implementing a reform programme to secure urgently needed funds from its international creditors.
The world’s major central banks have long followed the same general flight path, guided by the economic winds of growth, inflation and financial markets. It has worked pretty well for policymakers in the United States, Europe, Japan, and the United Kingdom: moving together to tighten or loosen monetary policy makes things more predictable for citizens, businesses and investors. It also serves as buffer to any volatile currency movements, at least among developed economies. But six years after the worst recession in decades, this could be the year central bankers split off and – with some risk – go their own way.
More cheap loans to banks was the European Central Bank’s answer to boost bank lending to private businesses in the euro zone. But the latest data show credit growth is still contracting and the best some economists came up with is that at least it’s not as bad as it was a year ago when it was shrinking faster.