The European Central Bank's (ECB) credit mechanisms across the Eurozone are painting a varied picture, with little significant momentum. Loans to households and businesses saw only a modest increase of around 0.5%/ 0.6% in July compared to the same period last year. At the same time, the M1 money supply—a narrow measure of money—contracted by 3.1%, reflecting tightening financial conditions.

Meanwhile, the broader M3 money supply surged by 2.3% year-on-year, reaching a record €16.377 trillion in June 2024. The economic picture shows mounting pressure on the ECB to loosen its monetary policy, especially as recessionary trends become more evident in the Eurozone's private sector.

The ECB will be faced with the task of monetizing the growing government debt in the course of government spending programs that serve the purpose of simulating economic growth. The process is likely to accelerate massively in the coming months and years.