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Euro Crisis Alive and Well

Bank lending to private households in the eurozone contracted again in November as the region’s Euro Crisis continues to dampen demand for credit, data showed on Thursday.

Eurozone bank loans to the private sector shrank by 0.8 percent in November from the level in the same month in 2011 after already shrinking by 0.8 percent in October, the European Central Bank said in a statement.

President Mario Draghi has said that weak lending to the private sector reflects a pessimistic view of eurozone growth prospects and heightened risk aversion amid the crisis.

The ECB also published eurozone money supply data, which suggest the money supply — a key guide to future inflation — is growing.

Growth in the M3 indicator, which measures the amount of money in circulation, grew by 3.8 percent in November, after already rising by 3.9 percent in October.

The ECB regards the M3 figure as a key guide to inflation pressures and uses it to set interest rates accordingly.

German Data Euro Crisis Unemployment

Unemployment in Germany increased slightly in December, but the country’s labour market seems to be holding up comparatively well to the eurozone debt crisis, official data showed on Thursday.

The jobless rate, in raw or unadjusted terms, rose to 6.7 percent in December from 6.5 percent in November, AFP reports.
But the seasonally-adjusted jobless total — which irons out seasonal fluctuations — was unchanged at 6.9 percent, the Federal Labour Agency said in a statement.

In concrete terms, the jobless total rose by 3,000 on a seasonally-adjusted basis, a much smaller increase than analysts had been expecting.

In raw or unadjusted terms, the total number of people registered as unemployed in Germany jumped by 88,341 to 2.84 million in December, the agency calculated.

“The German economy is feeling the pull of the recession in Europe. Indicators suggest that gross domestic product shrank in real terms in the fourth quarter,” said agency chief Frank-Juergen Weise.

“So far, the labour market has held up fairly robustly to the economic deterioration. But the slowdown is leaving its mark,” Weise cautioned.