France eyes a smaller public deficit and stronger economic recovery and morale among German consumers is at its brightest in 13-1/2 years. As Sonia Legg reports, it's all adding to a growing feeling of optimism across the euro zone.
A lack of lending has been a major problem for the euro zone in recent years. And hopes that February would show the first revival in three years have been dashed. Lending to households and firms fell slightly. But it's not all gloom. As the ECB's latest bond-buying programme kicks in, a slow turnaround in credit supply is on the cards, says Jeremy Batstone-Carr from Charles Stanley. (SOUNDBITE)(ENGLISH) HEAD OF RESEARCH AT CHARLES STANLEY, JEREMY BATSTONE-CARR SAYING: "I think it's highly likely that middle and perhaps to some extent smaller companies are benfitting from improvements in bank lending." Many in the region still need a boost despite increasingly positive economic data. The latest shows German consumer morale at a 13 and half year high and German real wages in 2014 seeing their largest increase since the data was first collected in 2008. Spain's also raised its growth outlook for 2015 to 2.8% from 2% on the back of higher household spending. And even France is forecasting growth higher than the previously expected 1% allowing Paris to cut its problematic budget deficit target. (SOUNDBITE)(ENGLISH) HEAD OF RESEARCH AT CHARLES STANLEY, JEREMY BATSTONE-CARR SAYING: "I have every confidence in French private businesses, I think it is the public sector where reforms are most needed and the pace of reform is extremely slow so I don't think that France is out of the woods yet." Greece certainly isn't. Monday is now the deadline for Athens to produce a list of reforms to satisfy its creditors and secure more bailout money. The ongoing crisis there is seen by some as one example of a broader trend. (SOUNDBITE)(ENGLISH) HEAD OF RESEARCH AT CHARLES STANLEY, JEREMY BATSTONE-CARR SAYING: "Politics continues to get in the way of a positive recovery in the euro zone and therefore without that reform it's hard to see anything other than the trend growth we have seen over the past few years." But "trend growth" is better than no growth at all. And although the euro zone revival is patchy - those not doing so well do tend to benefit from those who are.