"Neither in normal times nor in times of crisis can the European Central Bank be held responsible for survival” of institutions close to bankruptcy. From the Faculty of Economics of the La Sapienza University of Rome, where a conference is underway to commemorate the 25th anniversary of the death of the economist Federico Caffè, the governor of the ECB Mario Draghi reiterated today that the role of the institution in Frankfurt cannot be questioned. In short, the Eurotower will never be a lender of last resort, as many in Europe would like.
With its maxi three-year refinancing operations with rates at 1%, the ECB "has removed one of the impediments" to the flow of bank credit to the private sector - continued Draghi -, but Frankfurt "can do nothing to make up for any lack of capital, to change risk aversion or to remove national barriers”. AND' "vital for growth and employment that lenders are once again in a position to refinance the economy".
As for theItaly, the former governor of via Nazionale underlined how “the loan contraction seen in December has been halted, avoiding a much more severe risk of credit crunch, which would have had far more serious consequences on monetary growth and stability than we currently observe. The sample survey on bank lending records a gradual normalization of the interest rates applied by banks and of the criteria for granting loans to businesses. The continued anemic performance of loans reflects weak demand and worsening credit ratings in the face of an unfavorable economic cycle.
"Once the emergency has been overcome", the economic and budgetary policies of the countries of the euro area must "requalify" by aiming for "a decrease in current expenditure and the tax levy".
One of the biggest problems of our country – added Draghi – is the share of public expenditure dedicated to the unemployed and families, which is "less than half" of that of other European countries. At the same time, the share of pension expenditure "is clearly higher".
In general terms, the president of the Eurotower remarked how the European social model on the labor market is unfair to young peopleburdening them with "an eternal flexibility with no hope of stabilization". On average in the euro area, youth unemployment is 21,9% and the system "leads companies, among other things, not to invest in young people, whose human capital often deteriorates in low-value jobs". It's about "a waste we cannot afford".
