First glimmers of light in the long tunnel of the Eurozone crisis. Growth and inflation show a very slight improvement, at least for this year. To certify it is the ECB that today has left the frozen rate and zero, confirmed the quantitative easing plan to 80 billion Euros monthly and announced the departure in June of the new measures to encourage economic expansion. But alongside screenings and technical details, on the ECB board they are over even the Greek dossier, the Brexit risk and the references to the slowdown in emerging markets and the too slow process of structural reforms that are ballasting the recovery area. Not least, the new alarm on the spiral of the ‘effects of second level’ of too low inflation that would end up compressing wage and price setting off a dangerous chain reaction. The possibility of a Brexit does not seem to worry too much about the ECB who calls himself “prepared for any eventuality.” These are the words used by President Mario Draghi, in Frankfurt making it clear that there is already a plan B and it is technically ready to face shocks and turbulence triggered by a possible exit of Britain from the European Union.
A reassurance that comes on the day that the staff of economists ECB has raised its estimate of the GDP in 2016 bringing it to 1.6% from 1.4% and inflation at 0.2% by + 0.1%. Confirmed the projections for 2017, an increase of 1.7% and 1.3% while inflation was narrowed down to 1.7% from 1.8% the previous forecast of GDP for 2018 with an inflation views 1.6%. The recovery of the Eurozone “gradually proceeds at a moderate pace and may be slower in the second quarter from the previous quarter,” warned Draghi adding that “the risks remain tilted to the downside” but that there is a better “balance “thanks to the monetary policy measures and launched stimulus. The new round will start shooting on June 8, when the plan of corporate bond purchases by the ECB, which aims to better transfer the benefits of the expansionary policy to the real economy. June 22 is fixed the ‘window’ of the new edition of maxi-Tltro loans to banks. Today, as expected, the board of the ECB has left its key rate at a record low of 0%, the rate on bank deposits to -0.40% and the marginal lending facility at 0.25%. “Interest rates will remain at current levels or lower for an extended period and the quantitative easing program will last at least until March 2017,” Draghi made it clear, or at least as long as there will be a significant correction in inflation.
On the whole, the assurance that the ECB is ready to act and to use all the tools Inventory report if necessary. In practice, new expansionary measures and interest rates further down, even as the US Federal Reserve prepares to tighten monetary policy this month. But even in the US it is the Brexit unknown factor to influence the strategies of central bankers. While relying on the ability of the seal of the US recovery, there is the fear of making a risky step if the referendum was to be consummated the abandonment of the UK sparigliando cards. As for Greece dossier, the board of the ECB has discussed but decided to postponed the decision pending the reintroduction of the ‘waiver’, ie the exemption on government bonds which would allow Athens to the Greek banks to present the government bonds as collateral in refinancing operations. Bad news for Athens that counted on this important facility, but the greek Prime Minister Tsipras said he was convinced that the ECB will give the green light to the next meeting.
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