“The labour market reform introduced in Italy in 2015 has contributed to the renewed dynamism of employment in the country in the last few quarters”. This is what we read about the effects of the Jobs Act in the monthly bulletin of the Ecb, which underlines how “in Italy has been registered in the last four quarters, an acceleration” of employment, even if our Country, along with France, has contributed less to Germany to Spain to the employment recovery in the euro area.
The governing Council of the Ecb “expects the economic recovery to proceed at a moderate pace, but constant.” “The domestic demand continues to be supported by the transmission of monetary policy to the real economy. The favourable financial conditions and the improving prospects for demand and profitability of enterprises, continue to promote the recovery of investments.
forecasts on the Gdp, already popularized by president Mario Draghi at the meeting held on 8 September, amounted to 1.7% in 2016, to 1.6 in 2017, and 1.6 in 2018. The Eurotower warn, “however, it is expected that the economic recovery in the area is held back by the persistent weakness in foreign demand, partly linked to the uncertainty following the outcome of the referendum in the United Kingdom, as well as by adjustments budget required in different sectors and slow implementation of structural reforms”.
The Ecb stresses, however, that “it is necessary to take additional consolidation efforts, especially in countries with high public debt”. “These countries are particularly vulnerable to an increase in the volatility in the financial markets or rising interest rates”. At the same time, “the full compliance with the stability and growth Pact would be of support to the countries in the correction of budgetary imbalances, guiding them in such a way towards a trajectory of debt as adequate.”
The Bulletin also takes up the theme already highlighted by the president of the Ecb, Mario Draghi, on the need for “countries of the euro area with the margin of intervention on the public accounts make use of this space for maneuver, for example through the expansion of public investment”. Commenting on the shortfall in the decisions of the Eu Commission against Spain and Portugal, the Ecb underlines that “perspective, efforts must be made to ensure that budgetary plans are effective as early warning and instrument correction. This makes it necessary to apply fully and consistently, over time and between countries, of the provisions from the so-called ‘two-pack’”, i.e. those that aim to strengthen the supervision of the United in the economic difficulties and financial risks of contagion on the Eurozone or on those who already receive financial assistance and those that ask the Eu States to improve their economic forecasts and the control over the budget, entrusting both to independent bodies.
How to Brexit, is likely to weigh on export and investment in europe. In the economic bulletin, the Ecb warns of the risks “to the outlook of the trade” of the euro area “remain oriented toward the bottom and are connected mainly to the negative effects of the referendum on the permanence of the Uk in the Eu”. The growth of exports of goods to the United Kingdom, noticed the experts of the Eurotower, “began to lose momentum at the beginning of 2016. It is added to the sharp depreciation of the pound sterling against the euro.
it Is likely that the lower demand for imports in the United Kingdom not only has a direct effect negative on the trade of the euro area, given that the United Kingdom is one of the main trading partners of the area, but also an indirect effect on the interchange with other countries”. Also, “uncertainties related to the future relations between the EU and the United Kingdom, and the potential implications for the economy the euro area, could weigh on investment prospects”.
Continues in the euro area, the gradual recovery of bank loans”, also thanks to the extraordinary measures of the Ecb. The economic bulletin of the central institute reports as “the low interest rates and the effects of unconventional measures of monetary policy continue to support the dynamics of money and credit” together with “to the favourable prospects of the housing market”. The banks, explains the Ecb, “have transmitted the favorable conditions of financing to customers through rates on the loans and loose credit standards, thus supporting the recovery of loans”.
The eurotower estimate “that in the second quarter of 2016 the annual flow of external financing in total to non-financial corporations has increased”. In this context, the main effect of the extraordinary measures (OMRLT) has been reflected in an easing of the terms and conditions of the loan. Banks also reported that the additional liquidity was used especially for the delivery of loans and that the measure has produced a positive impact on their profitability.
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