The recovery in Italy is slow and serve more investment to make it faster and lasting; the economic environment remains difficult and too high unemployment, so that the target of reducing the public debt government in 2016 could be at risk, warns the governor Ignazio Visco in Final thoughts, which this year for the first time have been read at a different time by the general meeting of the Bank of Italy, held last April 28. But the country is at a turning point on impaired loans, an important issue which should not be overestimated.
” slow recovery, serving more investments “
Italy’s exit from recession is “slow and hesitant”: on it weigh the uncertainties of the world economy. The reforms made move in the right direction but not enough: we need to do more to boost investment and productivity of businesses, building a “solid, stable growth path,” says Visco, who took the opportunity of his final considerations issue a warning on economic growth: “we must, and can, do more.” The number one on Via Nazionale recognizes the goodness of what was done by the government especially on the employment front, it increased more than expected thanks to the tax relief and the Jobs Act. It also recognizes the progress made by the production system, and also underlines the important role played by the expansive policy of the ECB’s Draghi, without which the GDP would grow at least half a percentage point less in three years. But “for a more rapid and lasting recovery is necessary relaunch of targeted public investment, including in infrastructure assets, long-deferred” and it is also important to “further reduction of the tax wedge on labor,” said the governor. Who then calls to strengthen the incentives for innovation and support for the poorest income. If the budgetary margins are limited today, however, it is “possible to program the implementation of these interventions on a broader time horizon.”
“unemployment remains too high”
the demand for labor has started to grow at a faster pace than expected a year ago, and the rate unemployment of young people has dropped for the first time since 2007 more than two percentage points, but “the people are still losing too high”, says the Bank of Italy governor, noting that his “progressive resorption, which is essential to provide adequate living conditions to citizens, it is also necessary to bring inflation values in line with price stability. ”
“Turn on non-performing loans’
the mass of impaired loans of Italian banks must “be taken seriously but did not overestimate the scale of the problem.” He asks what the governor of the Bank of Italy, Ignazio Visco, in the Final thoughts, repeating as loans, “the legacy of the long and deep recession”, we are “a turning point” and the “trend toward normalization is continuing.” The governor also noted that European supervision is “aware that the reduction in impaired loans will only be gradual.”
“The banks reduce employees and contact ‘
the governor of the Bank of Italy then focuses on the need to rethink the organization of lenders. Italian banks must act on “costs, including those for personnel acting on quality and quantity of organic”, Visco asks in its report. It must be continued “in the reduction of branches” adapting “the model based on a widespread local presence.” According to the governor, “even more determined and timely action” on “will be essential costs’ for distressed institutions attenuating ‘impact on employees’ under the new rules of the Solidarity Fund.
“target on risky debt”
the governor then warns that the target for 2016 the national debt is at risk. “The evolution of the macroeconomic environment is likely to hinder the achievement of this target (the decline in government debt) in 2016; tight control of public accounts and the implementation of the privatization program may allow you to bring as much as possible the ratio of debt to GDP than planned and ensure a significant reduction in 2017, “says Visco. The government sees a decline in 2016 by 0.3 percentage points to 132.4%, and a descent to 130.9% the following year thanks to privatization of 0.5% of GDP per year.
the risk Brexit
“A negative outcome of the referendum on permanence of the United Kingdom in the European Union could create profound instability, “says the governor.
May 31, 2016 (modified May 31, 2016 | 11:14)
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