All that has been done so far may not be enough. The Eurozone countries most "vulnerable to tensions on the financial markets" must keep their guard up. So not only Greece, Portugal and Ireland, but also Italy and Spain "must be ready to adopt any additional measures that may become necessary depending on the evolution of the situation". This is the alarm raised by the ECB in its latest monthly bulletin.
Especially since the prospects are not good at all. According to the Eurotower, in fact, “the ongoing tensions in the financial markets and the unfavorable effects on the financing conditions could probably slow down economic growth in the euro area in the second half of the year”. In short, “the downside risks have intensified”.
GREECE: AVOID COERCION ON PRIVATE PEOPLE
Narrowing the focus on Greece, the Frankfurt institution therefore remarks that it has "strongly advised against any solution involving elements of coercion of the private sector", which must contribute to the recovery of the Greek country only on a voluntary basis.
WORK: LIBERALIZATION, MORE FLEXIBILITY AND MODERATION OF WAGES
In "difficult times" like these - the ECB writes - "labor market reforms are a key element, with particular attention to the elimination of rigidities". Furthermore, "measures that favor wage flexibility are needed: above all the removal of automatic wage indexing mechanisms and the strengthening of agreements at company level".
As for the "closed professional associations", according to the Eurotower they should be liberalized as soon as possible with "reforms that increase competition in the markets". In this sense it would also be desirable "the privatization of the services currently provided by the public sector, thus facilitating the growth of productivity and supporting competitiveness".
EUROLONDIA INFLATION WILL REMAIN OVER 2% IN THE COMING MONTHS
Finally, the ECB confirms that inflation in the euro area "has remained high" in recent weeks and new studies "have confirmed that it will probably continue to be above 2% in the months to come". On this front, however, a decrease is to be expected, even if in an unspecified "future".
