ECB: “The economic recovery has lost momentum. Steady Italy accounts … – The Republic

ECB: "The economic recovery has lost momentum. Steady Italy accounts … – The Republic

According to the bulletin Eurotower the Italian government may encounter difficulties in achieve the target of a deficit of 2.6% of the Product at the end of the year. The third quarter of the EU will be weaker than expected, willingness to act with unconventional instruments

MILAN – “risks remain on the Italian government’s ability to meet the objective of a budget deficit equal to 2.6% of GDP in 2014, especially after the economic picture is worse than expected result. ” And ‘this is the crucial step that the European Central Bank dedicates to Italy in its bulletin, suggesting that in the future, “it is important that Italy will further strengthen the position of fiscal policy in order to comply with the rules of the Stability and Growth Pact , in particular as regards the reduction of the public debt / GDP. ” Governments, therefore, Frankfurt asked to “give momentum to efforts to boost growth and employment on a sustainable basis in the euro area.” The magic word is always “reforms”: “It ‘s necessary to act decisively on the side of the structural reforms in the markets for goods and services and labor, as well as take action to improve the environment in which businesses operate.”

Looking at the whole of the Old Continent, economists Eurotower – they have with their economic forecasts led to a new cut the cost of money – they write: “In the third quarter, growth in the eurozone, according to the indicators available until August , will lose momentum and will continue to expand at a modest pace. ”

According to the monthly newsletter will continue to weigh on the recovery, among other things, “a high rate of unemployment,” although downhill: “The latest monthly data suggest that the rate should continue to decline, given that in June A further drop of 0.1 percentage points on the previous month, followed by a stable trend in July, reaching 11.5%. “

If the economic conditions were to remain disappointing, and” if we were to address the risks for too long a period of low inflation, the Governing Council of the ECB is unanimous in its commitment to resort to more unconventional instruments in the framework of its mandate. ” So the report confirms the words of Mario Draghi last press conference and holds the door open to quantitative easing, although in the recent past there has been no unanimity in choosing to cut rates and start the plan to purchase asset-backed securities (Abs): German Weidmann opposed.

Domestic demand is expected to continue to benefit from the choice of monetary policy measures put in place, the improvement in financial conditions, progress in fiscal consolidation and fiscal reform, and the fall in energy prices that supports real incomes. In addition, demand for exports “should find support in the global recovery.” However, the ECB noted, “the recovery will continue to be limited by the high level of unemployment, from the large volume of unused capacity, changes in the increasingly negative in loans to the private sector and the necessary adjustments to the financial statements conducted by the public sector and from the private sector. ” The main risks to this scenario, “continue to be a possible worsening.”