It is necessary to continue resolutely along the path of rigor and reforms. The warning was issued by the governor of Bank of Italy, Ignazio Visco, who spoke at the "Savings Day" organized today in Rome by Acri.
“The structural reforms will support the country's growth potential in the medium term – said the number one of via Nazionale -. It is crucial to achieve the announced budgetary targets and fully implement the reform programme, broadening its scope”.
The maneuvers to consolidate the public finances” launched starting from the second half of last year and the vast plan of structural reforms underway have helped to stop the loss of confidence in our economy – continued Visco -. The budgetary measures could not fail to have negative repercussions on the short-term economic trend, but they have avoided much worse scenarios than the current one”. In any case, "fiscal adjustment without structural reforms would inevitably end up being counterproductive".
FAMILY INCOME -9% IN 5 YEARS, SAVINGS COLLAPSE
The Governor then underlined how household income has "fell by 9% in real terms in the last five years". As a result, "the saved share of national income is now lower than the European average: below 17%, about 4 percentage points less than in the first half of the last decade, against 22 in Germany and 18 in France".
Visco explained that Italian families have therefore limited the repercussions of the collapse of incomes on consumption by drawing on accumulated savings and reducing current savings. In France and Germany, on the other hand, disposable income and household consumption grew, albeit at a limited pace, over the entire period.
BANKS: THE QUALITY OF CREDIT IS WORSEN
As for the activity of credit institutions, the number one of Bank of Italy noted that "credit quality is deteriorating" and in the second quarter of 2012 "the flow of new non-performing loans adjusted in relation to loans rose to 2,1% , returning to the levels of the end of 2009”.
According to preliminary information, "the deterioration has not stopped in the most recent months", particularly affecting "loans to companies, which recorded a default rate of 3,2%, with a maximum of over 6% for the construction sector". For loans to households, on the other hand, "the rate of entry into non-performing loans remained stable at 1,2%, a relatively low value compared with the past".
