“Between March 5st and June XNUMXth share prices decreased by around 17% in the euro area and about 6,5% in the United States”. They are getting worse “downside risks” for the entire eurozone economy: "growth remains weak and the increased uncertainty weighs on the climate of confidence". Meanwhile, "employment is declining steadily and the unemployment rate has reached historically high levels”. Furthermore, a further deterioration is expected in the months to come. This is the alarm launched today by the European Central Bank in its latest monthly bulletin.
The ECB expects the economy to continue to be held back by the "persistent tensions" on public debts, by their impact on bank lending and by the balance sheet consolidation processes of both states and banks. Meanwhile, inflation is believed to be oriented towards calming e the Governing Council says it will be ready to "act decisively" to ensure price stability. Words that seem to confirm the hypothesis of a new rate cut in July.
In this scenario – warns Frankfurt – “there is no viable alternative to rigorous fiscal consolidation“. The Eurotower warns the countries of the euro area against any "reduction of efforts" on this front, because "they would increase uncertainty in the markets", ending up curbing economic activity "to a much greater extent".
As for theItaly, his consolidation targets are “significantly more ambitious than those presented last year”, the ECB points out again, underlining how the update to the stability program presented last April plans to cut the GDP-deficit to 1,7% this year and to 0,5% in 2013. “The goal of a a substantially balanced budget is set for 2014”, concludes the central bank.
