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This article was published on 9 October 2014 at 11:03.
The exit from the crisis seems to be more of a mirage for the Eurozone and the expectations for 2015 are deteriorating. The monthly newsletter of the European Central Bank certifies, once again, the obvious: economic growth in the euro area “is weakening”, with the confidence and ‘above all’ private investment depressed by the complicated geopolitical situation , subject to two major outbreaks of risk, the Russian-Ukrainian and Middle-Eastern.
They could then weigh ‘insufficient progress on structural reforms in the countries of the area. ” The result is that the “modest recovery” that the ECB still sees for next year, may fade even more: the risks to the economic outlook “remain tilted to the downside.”
The ECB stresses the importance of the reforms, noting that in Germany, the crisis did not produce significant effects on the dynamics of the unemployment rate and the long-term unemployment, a decline from the mid-2000s, in part, thanks to structural reforms launched around that time. At the same time the unemployment rate, the report insists, “has more than quadrupled in Spain, while the incidence of long-term unemployment on that total has risen from less than one-fifth to more than half.” Similar trends, although less pronounced, “have been observed in all economies subjected to tension,” including Italy, “to indicate the existence within them of significant barriers to re-employment.”
The conclusion is obvious: “Some countries – insists the ECB bulletin – clearly need to give impetus to the legislative process and implementation of structural reforms, as regards the markets for goods and services and labor as well as interventions aimed at improving the context in which businesses operate. ” “Monetary policy – once again repeats the ECB – contributes to support economic activity,” but, “to strengthen the business of investment, creating jobs and growth potential, it is necessary that other policy areas economic to provide a decisive contribution. “
In any case, the report records what has already been said many times by the top Eurotower and that is that the board is determined” unanimously “to resort to other extraordinary measures, if it was “necessary to address risks associated with a prolonged period of excessively low inflation.” A position recently reiterated by the same hawk Jens Weidmann, president of the Bundesbank, which, however, does not shrink from no mandatory programs to not only purchase of government bonds, but also ABS and covered bonds. The ECB aims to have inflation below but close to 2%, now stands at around 0.3 percent.
Other unknowns are represented, according to the Eurotower, even from the “continuation of a rate negative variation in bank lending to the private sector and the necessary fiscal adjustment in the public and private sectors. “
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