“We see the first tangible effects that our package of measures is having” on credit dynamics in the euro area. This was stated this afternoon by the president of the ECB, Mario Draghi, during a hearing in the European Parliament. The reference, in addition to the cut in the reference rate to the historic low of 0,05%, is the covered bond purchase program and above all the new Tltro auctions (the first went down in September, the second scheduled for December), or the low-yield refinancing that the Central Bank grants to individual institutions as long as they undertake to use the liquidity received to finance the real economy.
“DOWNWARD RISKS STILL FOR THE EUROPEAN ECONOMY. IN 2015 AND 2016 MODEST RECOVERY”
The Eurotower number one then reiterated that economic growth in the Eurozone "weakened during the summer and recent forecasts have been revised negative", therefore the risks for the Euroland economy "remain oriented to the downside" , even if “our expectations of a modest recovery in 2015 and 2016” also remain valid.
Draghi's words come a few days after the publication of the data on theGDP performance in the currency area and in individual countries at the end of the third quarter. In particular, Germany and France recorded cyclical growth of 0,1 and 0,3% respectively (with Berlin narrowly avoiding the technical recession after -0,1% in the April-June period), while Italy continued to travel in negative territory, registering a drop in GDP of 0,1% compared to the previous quarter and preparing to close the year with a loss of 0,3%.
“ENERGY STRUCTURAL REFORMS ARE NEEDED”
Faced with a similar picture, Draghi reiterated that monetary policy "alone" cannot guarantee the relaunch of the economy: "2015 must be the year in which all policy makers implement the necessary policies to relaunch growth”, because the “fragmentation” among euro area countries “also derives from national imbalances and inefficiencies, the overcoming of which requires vigorous structural reforms”.
“READY FOR NEW MEASURES IF NECESSARY”
In any case, the Governing Council of the ECB - Draghi concluded - remains unanimous in its determination to make use of new unconventional monetary policy instruments if this is necessary to address the risks associated with excessively extended low inflation over time. In this case, the reference is to a European-style Quantitative Easing, ie a program of generalized purchases of public and private securities. According to the Directory, however, the measures already taken (also worthy of mention is the program for the purchase of Abs, which will start shortly) will be sufficient to bring the ECB's balance sheet back to the peaks reached at the beginning of 2012.
“NO NEED TO RESTRUCTURE AGAIN THE GREEK DEBT”
Finally, regarding the situation in Greece, Draghi vigorously rejected the hypotheses of a new public debt restructuring: “We don't think it's the right thing to do, we don't think it's necessary and we don't think it would be useful. The facts are that if Greece stays on track on reform and consolidation, then its debt is sustainable."
