A public financial parachute is needed to complement the single bank resolution fund. This was stated by the OECD in its report on the Eurozone presented today in Brussels. According to the Parisian organization it is essential that the Fund is "sufficiently capitalized".
The Report also contains recommendations to the Governments of the Eurozone, which OECD Secretary Angel Gurria advises to consolidate budgets "while preserving the necessary public investments in education, infrastructure, innovation and other programs that promote growth economic".
According to the OECD secretary "The Eurozone is beginning to show signs of the long-awaited recovery, but the global situation is still fragile as a result of the difficulties of some emerging countries and the still largely unknown monetary policy action of the Federal Reserve".
In Eurozone countries it is necessary "to limit the exposure of banks to the debt of a single sovereign issuer". As regards public debt, then, Italy, Greece, Portugal and Ireland still have a long way to go to bring it to adequate levels.
Furthermore, great efforts will have to be made on the unemployment front, preventing it from becoming a cyclical rather than a structural problem. The OECD recipe is to "reduce the tax wedge to increase employment incentives".
