The ECB keeps the cost of borrowing to 0.15%, but the president puts the emphasis on the lack of courage in reforming countries. There are still downside risks to the recovery by geopolitical tensions. The Prime Minister: “Right, we need to tidy up Italy”
MILAN – The hardest blow to Italy comes from the ECB. Mario Draghi’s words leave little room for interpretation: “One of the components of the low Italian GDP is the low level of private investment.” Worse, it all had to “uncertainty about the reforms, a very powerful brake that discourages investment.” The coup de grace, however, comes from the last step of the intervention of Dragons: “For the eurozone countries now is the time to give up sovereignty to Europe with regard to structural reforms.”
Translated: the Eurozone countries are not in degrees of reform on their own, better then that intervene directly in Europe from Brussels. On the other hand, the number one ECB calls for months to step up structural reforms and “do not undo the progress made in fiscal consolidation”, with measures to promote growth. And just today pointed out that “the countries that have made convincing structural reform programs are getting better, much better than those that have not done so or have done so inadequately.”
comment Renzi . In the evening to “On Air” is about the President of the Council. “I agree with Draghi. ECB President said something sacrosanct: we need to tidy Italy to make it more competitive. For this reason need reform. With which Italy returns to growth and fly. ”
Then, on the issue of ‘transfer of sovereignty’, the premier added: “He made a broader Europe. Did not say that Italy has to go to a transfer of sovereignty” on reforms but “has spoke of the Eurozone. ”Of the remainder, the head of government, “Italy is not just to work hard, but all of the eurozone and for this you need a reflection.” “Some figures show that even countries like Germany, which is much better than us, they begin to show signs not very beautiful. Most Italian Industrial Production in June 0.9%, Germany 0.3% over … I would trade places with the Germany’s industrial production, but it is a sign that a little bit throughout the eurozone needs to reflect on itself, these are the recipients of the words of the Dragons. But what concerns us we can not do what we have to do for thirty years ” .
Returning to Italy, the prime minister noted that we are never technically left the recession, and that “Italy is not over, pace of owls and jackals.” “We have economic conditions for which we are much stronger than the fears of those who fear or a default or a failure. Hypothesis that letters arrive from Brussels does not exist.
So, the question of a possible maneuver replies “There will be a maneuver of spending cuts.” “This government – he continues – began tagliarte government spending, cut the blue car with the cap on salaries of managers, influence over forty spending centers. But enough has been done? No. “And again:” We need to EUR 16 billion for 2015, a figure that allows us to remain well below 3%. “
Monetary policy . From the monetary point of view, however, has remained quite firm: the Governing Council of the ECB has left its key rate to 0.15% and the marginal lending to 0.40% and the deposit rate in a negative -0.10% . A level from which it scosteranno long: “They will remain low for an extended period of time,” said the president of the ECB, Mario Draghi, not to mention possible further declines. How to say this is the minimum level.
The fact that the cost of money is not destined to go down further does not prevent the ECB to use other tools to deal with the crisis: “The Council of the ECB has also unanimously determined to use unconventional measures if necessary. The interventions will report to the inflation target of 2%, “said Draghi stressed that the recovery is moderate and uneven and inflation expectations have declined only in the short term.
A worry the central bank European Union are the geopolitical tensions that can penalize the recovery in the eurozone, starting with the tensions between Russia and Ukraine. Against Moscow are already sanctions taken by the USA and the EU, today came the reply with all the embargo ‘ import of products agrolimentari: Only for Italy it is a loss of over 700 million euro.
In the meantime, the ECB is preparing to use extraordinary means: “We have intensified the work
preparation for market acquisition of asset-backed securities (Abs) to strengthen the transmission mechanism of monetary policy – said Draghi – and if the situation worsens it could proceed with the purchase of bonds in the market at a large scale. “
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