MILAN – The weakness of the economic recovery is also affecting core inflation, that calculated net of oil that is at its lowest for many years. The concern of the ECB for the level of the recovery and the price is real and that’s why all of his top representatives are engaged in saying that – even though it was recently launched a massive remodeling plans to support the economy – the Eurotower can do even more. Also because the EU has kept under constant pressure and is therefore difficult to say whether it will be able to stand up to new waves of crisis.
Uncertainty on the global economy, deflationary pressures and questions about the future of young people and Europe are therefore the focus of the message that the governor of the ECB, Mario Draghi , wrote in an editorial in the 2015 Report of the central Bank. “The 2016 will not be less demanding of the year just past to the ECB,” noted the governor. Dragons claimed that thanks to the strong stimulus measures, the ECB has demonstrated “that does not surrender to an excessively low inflation, even in the face of global deflationary forces.” According to a number of Frankfurt, launched the stimuli let you add about 1.5 percentage points to gross domestic product in the euro area over the period 2015 to 2018, and have then avoided that the inflation fell to even lower values. “The outlook for the world economy are surrounded by” and “uncertainty pose questions about the direction in which will go to Europe and its resilience in the face of new shocks” in any case,. In this sense Draghi has emphasized on high youth unemployment that affects “the most educated generation ever,” and represents a significant weak point: “To avoid a lost generation we must act quickly.”
PREFACE TO REPORT ECB. The words of the governor
From the annual bulletin also emerged lights and shadows on Italy: on the one hand, looking at the euro area countries which have been identified “excessive imbalances”, the ‘monetary institution has recognized the Peninsula have shown a performance level “somewhat greater extent” than the recommendations made by the European Commission, as compared with other states in the same situation, such as Portugal and France. Since however, in general, the progress of the countries have been limited on a large number of recommendations. On the other side, in the same publication are reminded that Italy is among the four countries whose 2016 budget was estimated “at risk of not implementing” against the rules of the Stability and Growth Pact (the final judgment of the EU it is expected after the spring economic forecasts). As regards the consolidation of public finances, however, the ECB always invokes a discipline “pro-growth”, siding on the side of those who believe in flexibility as a tool to strengthen the recovery. Without the measures taken by the ECB, “the Italian recession would end only in 2017, and inflation would remain negative throughout the period of three years,” he explained the governor Ingazio Visco .
as for the general economic situation, the chief economist Peter Praet told a Frankfurt conference that the stimulus measures of the European central Bank may be further increased if the economy of the euro zone were to be hit from new shocks: “If further adverse shocks materialize, our measures could be recalibrated once more, in the manner commensurate with the headwind force, including consideration of possible side effects,” he explained Praet. In an interview with Republic he had confirmed the possibility of expanding the negative threshold of interest rates. The same minutes of the ECB Governing Council, concerning the meeting last month in which he launched a new package of anti-deflation measures, show that the board did not rule out future further cuts in interest rates which may be necessary in the case of economic shocks.
the fears on price, that the ECB should be close to + 2% and are now crushed to zero, were also highlighted by Vice President Vitor Constancio at the EU Parliament: the low overall inflation is now “contaminating” the underlying momentum in consumer prices, in practice “underlying inflation”, ie the index adjusted by energy and food prices, which are particularly volatile. After yet another invitation to set up a common EU framework for bank deposit guarantees, to complete the union of credit, guaranteed that the ECB “has done and, within its mandate, he will continue to do all that is necessary to pursue its goal, which now also involves trying to boost growth in order to close the gap between actual growth and potential growth which is creating downward pressure on inflation. ” But as he always does Draghi lashed politics: “But – added the number two of the ECB – other policies must act on their flights to ensure a sustainable and lasting improvement in the economic outlook.”
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