the ROME – The economic recovery in the euro area “continues to proceed at a moderate pace, but the constant” the economy “has shown a remarkable resilience and a capacity to react to the developments of adverse and global uncertainty”. So Mario Draghi, the president of the Ecb, at the european Parliament on the occasion of the presentation of the debate on the annual report for 2015 of the Ecb. “Inflation will continue to soar in the next few months,” continues the former governor of the bank of Italy. Even if “you still do not see a strengthening in the dynamics of the underlying prices”. But “the return to a level close to 2% inflation will depend on the continuation of monetary expansion”. And, therefore, from the continuation of the program of Quantitative easing. On the other hand, the stimulus of the Ecb to bank loans is “remarkable”. And the same financial sector is the strongest for the capital, ‘leverage and financing.” At this stage, then, for the Dragons, “is as important as ever for Europe to respond to the challenges of source in a cohesive and determined”. Because “nowadays content the risks of speculative bubbles”.
The Qe will not stop. More clear so the president of the Ecb could not be in front of the meps who are about to give a positive review of its monetary policy. For now, the “Quantitative easing does not stop, we will remain committed to preserve the very substantial settlement money necessary to ensure a convergence of sustained inflation towards levels below, but close to, 2% over the medium term”.
Recovery. The recovery of the Eurozone continues to proceed at a moderate pace, but stable” and “has demonstrated a remarkable resistance to the developments of adverse and uncertainties that arise from the global environment”. Dragons reminds us that “unemployment in the Eurozone is steadily declining” and that “from the beginning of the year, the inflation rated has gradually resumed moving from the negative rate of 0.2% in February to 0.5 of October”.
Inflation. annual inflation will continue to rise in the euro area in the coming months, but “we are not seeing a strengthening in a consistent way the dynamics of the underlying prices”. Draghi adds that “the greater part of the increase in inflation forecast will be driven by the statistical effect related to the stabilization of oil prices”. “The return of inflation toward our goal of a rate below but close to 2% over the medium terms is based on the continuation of the current level of monetary support unprecedented in spite of the gradual reduction of the output gap (difference between potential growth and real growth – ndr)”.
Quantitative easing. “our monetary policies by June 2014, have been a key factor behind the positive developments in the economy of the Eurozone, in particular the Tltros, the purchase of the assets and the low interest rates “have strongly supported the recovery”. And “the transmission of our monetary stimulus to the lending conditions of the banks has been significant.”
Banks. european financial sector is now stronger in terms of capital, ‘leverage’, finance and risk-taking. According to Draghi, the common equity tier 1 capital in the euro area has “improved substantially”, from under 7% in the banking groups significant in 2008 to over 14% today.
fiscal Policy right. “we Continue to face a number of structural challenges that hold back the expansion dynamic of the economy of the eurozone”, to this “must be designed the appropriate policy to address the vulnerabilities and challenges that exist, and finally, to ensure a sustainable growth higher for the eurozone”. Can not be, therefore, only monetary policy the driving force of the Gdp. “Tax policies should support economic recovery, while respecting the fiscal rules of the european Union”, where “, for example, a composition of fiscal policies, and more a friend of the growth could push the growth”. If, in short, to be a part of “a financial sector competitive, it is essential for the growth, on the other, “we need more decisive action to increase the potential growth rate”.
Accelerate the pace of reform. “The implementation of structural reforms must be accelerated in a substantial way”, and this applies in particular to the actions of the policies to increase productivity and improve the environment for businesses”. For Dragons, “we must make the best use of the annual cycle of economic governance in ensuring that the recommendations, including those for the eurozone, are really taken into account and effectively implemented”.
The memory of Ciampi. “it is now more important than ever and the need for Europe to respond together and decided to the challenges it faces”, concludes the Dragons. Then, remembering the words spoken by Carlo Azeglio Ciampi in the same parliament hall ten years ago: “If we act alone we will be at the mercy of events greater than us, of events that threaten peace and security in europe.”
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