Italy's accounts are at risk. After the recent exit from the European infringement procedure for excessive deficit, our country could immediately go back over the deficit ceiling of 2,9%. The warning comes from European Central Bank, who in his latest monthly bulletin recalls how the cash flow data of our country up to July 2013 indicate a cumulative financial requirement of 51 billion euros, up from almost 28 billion in the same period of 2012.
“The deterioration, mainly due to the disbursement of support to the financial sector and the repayment of arrears – reads the text -, highlights the growing risks to achieving the general government deficit target in 2013”. The ECB then recalls that in August, “the government announced, for the current year, the abolition of the first installment of the tax on main home ownership. The lost revenue, amounting to approximately 2,4 billion euros, or 0,1% of GDP, will be compensated for by containing spending and increasing revenues”.
The countries of the euro area, including Italy, must therefore not let their guard down consolidation of public finances: “They have made considerable progress in reducing imbalances, albeit with marked differences – writes the ECB -. However, further consolidation efforts are needed to put public finances on a sustainable path. Although tensions in the financial markets have eased in the last twelve months, the alert level should not be lowered given the long delays in the recovery that remain in some countries. The composition of the consolidation should favor measures that favor growth, giving priority to the containment of unproductive public spending”.
As for the recovery, from Frankfurt they reiterate that “real GDP growth it was positive in the second quarter, after six quarters with a negative sign” and “the confidence climate indicators up to August confirm the expectations of a gradual improvement in economic activity starting from low levels. For the remaining months of 2013 and next year, in line with the basic scenario, a slow recovery of the product is expected, above all on the basis of a progressive improvement in domestic demand”. The monetary policy of the ECB however, it will remain accommodative “as long as necessary: the Governing Council confirms that it expects the ECB's key interest rates to remain at or below current levels for an extended period of time”.
On the front ofoccupation, according to the ECB "the data in the euro area mainly suggest that conditions have deteriorated steadily in recent quarters due to the weak economic activity", even if "the recent monthly data on unemployment suggest slightly more favorable prospects, as the unemployment rate in the euro area has remained stable since March”. In general, "employment is likely to have further decreased in the second quarter of 2013 and is expected to decrease also in the third", concludes the ECB.
