Managers of European firms offered a more positive assessment of the European economy's growth prospects in August, seeing signs of recovery in almost all sectors, including services, industry and construction, the Commission said.
The survey on business and consumers (called the 'Economic Sentiment Indicator') is conducted every month from a sample of about 125,000 firms and almost 40,000 consumers.
The European Commission's economic department reckoned that the growth in industrial confidence is due to increased production expectations and a more positive assessment of order books by manufacturers (EurActiv 25/08/09).
But the improved mood has not yet been matched by lending conditions to firms, which remain tough in Europe and have worsened in recent months, according to new ECB figures.
Loans to the private sector underwritten by banks grew by 1.8% in May. Since then, growth has slowed down. In June loans increased by only 1.5%. The latest available figures show that in July, growth in loans to the private sector stood at 0.6%, after monetary developments in the euro area recorded by the ECB.
This new credit squeeze is occuring despite massive amounts of cash injected into European markets by the ECB. In June, Frankfurt lent European banks a record €442 billion to counter the credit crunch, which is primarily penalising small and medium-sized enterprises (EurActiv 25/06/09).
Interest rates are at the lowest level ever recorded, while in May the ECB also decided to buy covered bonds worth €60 billion for the first time to boost confidence in credit markets. The Bank also announced it would double the maximum length of time it lends money, extending to a year the previous period of six months (EurActiv 08/05/09).
