ECB: ‘Investing for growth, “Draghi of Italy: accounts at risk – Corriere della Sera

ECB: 'Investing for growth, "Draghi of Italy: accounts at risk – Corriere della Sera

The EUROZONE

Milan , September 11, 2014 – 21:30

     
     
 

Mario Draghi starts from Jackson Hole. To revive the economic recovery in the euro, exceeding the new paradigm of low growth and low inflation, high debt and high unemployment, we need a combination of monetary, fiscal and structural supports ECB President at the dinner gala organized by Eurofi in Milan. And to do that all the parties, at national and European level, should play its role, in line with their mandate laid down in the EU Treaties. With a warning “There is no monetary stimulus (and in fact no fiscal stimulus) that takes if not accompanied by the right structural policies,” says Draghi immediately to wipe out any misinterpretation. It then addresses the central theme of his speech, the crucial role of investment to jump-start the euro zone.

The crucial role of investment

” If we fail to boost investment, weaken the economy short term, and would compromise the long-term prospects, “says the president of the ECB remembering that investment will also be discussed at the informal Ecofin meeting in Milan on Saturday. Investment is one of the “illustrious victims” of this crisis. Draghi ago the figures: the maximum to the minimum decreased by approximately 20%, compared to a decline of 15% recorded during the recession of 1992, “There will be no sustainable recovery until this situation does not change.” And “a sharp increase in investment is essential to bring inflation where we want to see it,” that is close to but below 2% “to jump-start the economy and reduce unemployment.”
There are two key areas where you need the combined efforts of the governments of Europe and to boost investment. First, the regulatory framework should be made more conducive to growth; secondly, businesses should have access to more diverse sources of funding, Draghi says supporting the launch of a single capital market, as proposed by the new Commission President Jean-Claude Juncker.

The Abs

Particular attention, according to Draghi, it is worth developing a well-functioning market for securitized assets “simple and transparent”, so-called Abs. It suggests that governments consider the possibility of granting government guarantees to support lending to small and medium-sized enterprises, as happens for example in the United States. The ECB is preparing to make its contribution, since last week the Board of Governors decided to start buying Abs and high quality bonds (covered bonds) in October. In September instead start the new long-term refinancing operations (Tltro), to encourage bache to increase lending to non-financial companies.

September 11, 2014 | 21:30

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