The optimism of the president of the European Central Bank (ECB) will be the last to die. Although he has declared a slight reassessment of eurozone growth estimates downwards, Mario Draghi is convinced that "there will be a gradual recovery of the economy over the course of this year". He declared it at the press conference at the end of the Governing Council of the ECB, after the interest rate decision which remained unchanged at 1%.
GROWTH – The Frankfurt institute has revised downwards its estimates for the growth of GDP in the euro area over the next two years. NoIn 2012 the Euroland economy will grow between -0,5% and +0,8% (while the December estimates forecasted a fluctuation between -0,4% and +1%). While in 2013 there will be zero growth in the worst case, +2,2% in the best (according to previous forecasts +0,3% and +1,3%). The analyzes of economic activity in the euro area "confirm signs of stabilisation", said Draghi, "however the prospects remain subject to downside risks".
INFLATION – Inflation will also shake in the 17 countries of the euro zone in these two years, the estimates of which, including increases in energy prices and indirect taxes, have been revised upwards. In 2012 it is estimated that inflation will fluctuate between 2,1% and 2,7% while in 2013 between 0,9% and 2,3%. Last December, ECB technicians had indicated inflation in 2012 between 1,5 and 2,5 per cent, and between 0,8 and 2,2 per cent on 2013. “It is probable that the inflation will remain above 2 per cent in 2012”, Draghi declared, “with upside risks predominating”.
GOVERNMENTS – Mario Draghi then urged to continue with the reforming action. "Many governments" in the euro area have made "progress" in fiscal consolidation and structural reforms: now it continues to be "fundamental" to continue reforming action, he said.
LTRO2 - The new ones long-term maxi loans of the ECB in favor of the banks have been “an indisputable success”, continued Mario Draghi. Together with fiscal consolidation, they have resulted in a "significant improvement" and the Ltro2 "will further support the stabilization of financial markets". Clear examples of this are the "return of confidence in the euro" and the fact that "the demand from investment funds and pension funds is returning". However, Draghi has neither denied nor confirmed the hypothesis of new maxi auctions of 1% loans. Some time ago Ewald Nowotny, the governor of the central bank of Austria, had spoken out against the likelihood of new maxi loans. Draghi, on the other hand, specified that the European Central Bank must now "thoroughly analyze" how the economic and financial scenario will change.
BUNDESBANK – Finally, the president of the ECB wanted to underline the coincidence of interests with the German Bundesbank: “We all share the same goals and I believe that there is nothing to be gained from quarrels and public statements outside the board. Relations with Bundesbank president and ECB member Jens Weidmann are excellent,” he concluded.
