La ECB will probably lower its growth forecasts for the eurozone. He announced it today Ewald Nowotny, member of the Eurotower Governing Council and president of the Austrian Central Bank. The presentation of the new estimates by the Frankfurt institute is scheduled for 6 September.
“There will be no improvement – underlined Nowotny on the sidelines of an economic forum in Alpbach -, but more likely a deterioration”. The differences in growth between northern and southern countries in the Eurozone have "unfortunately" widened and the ECB estimates "that almost all southern countries will record negative growth in 2012". For France, added the Austrian central banker, "stagnation" is expected.
In June, the Frankfurt Institute had forecast a 0,1% contraction of GDP for the eurozone in 2012 and a 1% increase in 2013.
As for extraordinary monetary policy measures that the European Central Bank has used to stabilize the markets, Nowotny said they could be immediately halted if necessary.
Since the beginning of the financial crisis, the ECB has intervened with various instruments, including the two maxi 3-year refinancing operations Ltro (December 2011 and February 2012) which injected 1.000 billion euros into the banking system of the Eurozone.
In reality, today the markets are certainly not expecting an interruption of the extraordinary measures from Frankfurt, but rather an increase in them. The declarations of President Mario Draghi should go in this direction: “The ECB will do what is necessary to ensure price stability – wrote the governor a few days ago in the German newspaper Die Zeit -, it will remain independent and will always act within the limits of his mandate. But precisely this mandate sometimes requires us to go beyond the standard tools of monetary policy”.
