More worries are heaped on the ECB as latest figures show euro zone banks reluctant to take up its cheap loans, while French core CPI slips into negative territory. David Pollard reports.
For a Christmas treat, try skating - and not any old skating. This rink is nearly 60 metres up in the air - in that most famous of Paris landmarks, the Eiffel Tower. The tourists love it. (SOUNDBITE) (English) AUSTRALIAN TOURIST, NAOMI, SAYING: "Skating on top of the Eiffel Tower is amazing, a lifetime experience. Yeah, really cool." Less cool for France perhaps is the first drop in its core inflation in over two decades. It contracted by 0.1 per cent month on month in November, down 0.2 per cent on the year. A worrying trend, says Craig Erlam of Alpari. SOUNDBITE (English) CRAIG ERLAM, MARKET ANALYST, ALPARI, SAYING: ''If the big three, the major three countries at the core are the ones driving down the inflation readings, this is a concern because it suggests that the rotting in the periphery is now spreading to the core. And that's where it becomes a much longer-term issue.'' It wasn't the only negative of the day. Take up of the ECB's second round of cheap loans, or TLTROs, was just short of 130 billion euros. In total, euro zone banks have only borrowed little over half of the 400 billion available to them. SOUNDBITE (English) CRAIG ERLAM, MARKET ANALYST, ALPARI, SAYING: ''Banks do not want, are not interested in these cheap loans. Clearly there's a case of the banks don't want to lend to the economy right now even if the risk is much lower. Clearly this would suggest that there's no demand either for these loans either in the real economy so the banks don't see it as worth the risk to take up these loans in the first place.'' The ECB slashed its growth forecasts last week. Inflation next year is now seen at 0.7 per cent - way below the one per cent seen as a 'danger zone'. The ECB appears to have few options but to add more stimulus. Justin Urquhart Stewart of Seven Investment Management. SOUNDBITE (English) JUSTIN URQUHART STEWART, SEVEN INVESTMENT MANAGEMENT, SAYING: ''Getting this economy going has been very difficult. It's like lighting a damp firework with a wet set of matches ..... Will we have QE? Yes, we will. Will it be called QE? Probably not.'' And there's another worry. Whether it's called QE or anything else, some fear the ECB may simply be too late to act - leaving the euro zone economy on ever thinner ice.