IMF fears Fed tapering could 'reignite' euro debt crisis The report came as fresh data from the ECB showed that loans to the private sector contracted by €46bn in June, after falling by €33nbn in May , and €28bn in April. The annual rate of contraction has accelerated to 1.6pc. The M3 broad money supply is also fizzling out, with growth dropping to 2.3pc year-on-year. There has been almost no growth in M3 since October 2012. The money data tends to act as an early warning indicator for the economy a year or so ahead, and therefore casts doubt on recent claims by EU leaders that the crisis is over. "Today's figures put serious question marks over the strength of the nascent recovery," said Martin van Vliet from ING. The data is at odds with the recent rebound in industrial output and rising PMI survey indexes for manufacturing. The IMF said the eurozone economy would shrink by 0.6pc this year, the same as in 2012. Such an outcome could push the periphery toward a debt-deflation spiral," it said. While polite in tone, the authors appear exasperated by "incomplete or stalled delivery of policy commitments" and seemingly endless foot-dragging by EMU leaders. The hurdle for reaching a collective agreement is always high. Moreover, building political support for such decisions can take considerable time, especially when they involve thorny issues such as burden-sharing or ceding national control. Hence, making swift progress on completing the banking union and moving toward greater fiscal integration are proving exceedingly difficult. In a comment clearly aimed at Germany and the key creditor powers, the IMF said "unwavering political backing for institutional reforms remains critical and is in the interest of all EMU members."