In Italy, “fiscal consolidation targets have been eased considerably since last year's update from the stability program towards a more gradual adjustment path. Based on expectations, in 2013 the public debt-to-GDP ratio would reach a peak of around 130%”. This was noted by the European Central Bank in the quarterly analysis on public finances included in the monthly bulletin. According to the Eurotower, the recovery path envisaged in the latest Italian stability plan "must be rigorously respected, so as to minimize the risks of exceeding the 3% limit" of the deficit-GDP ratio.
“This will be a key challenge for the new government – continues the text -. There are risks connected to the interventions to reduce the deficit which mainly concern a worse macroeconomic evolution than expectations, but also a slowdown in revenues compared to the hypothesized dynamics as well as higher expenditures”.
In any case, the ECB also underlines that Italy is among the six euro area countries to have reported a budget deficit within the limit of 3% of GDP together with Germany, Estonia, Luxembourg, Austria and Finland. At the same time, however, our country is one of those with the greatest debt, whose incidence on GDP is expected at 132,2% in 2014 by the European Commission.
EUROZONE: RECORD UNEMPLOYMENT, SLOW RECOVERY OF GDP SINCE THE END OF 2013
The prospects for the labor market in the euro area remain gloomy. "In the context of economic weakness and ongoing restructuring in several countries, conditions have systematically worsened in recent quarters," notes the European Central Bank in its latest monthly bulletin.
In April, unemployment marked a new increase to an all-time high of 12,2 per cent and "the lack of job creation - adds the ECB - combined with the weak results of the activity surveys suggest another increase in unemployment in short term".
Recently, however, surveys on economic activity have shown "some improvement" in the euro area, and the Eurotower expects the start of an economic recovery "later in the year". However, the recovery will take place at a slow pace.
