Growth slows down, indeed the risk of stagnation is increasingly real. This is the message that emerges from the words of Jean Claude Trichet at the end of the directory of the ECB. The GDP for 2011 of the 17 euro area countries, according to economists in Frankfurt, will grow within the range between 1,4% and 1,8% against the 1,5% - 2,3% expected in June . The 2012 increase will be even more contained: between 0,4% (the most probable estimate for Italy) and 2,2%.
On the other hand, inflation, due to the slowdown in the economy, is less scary: fears of a price increase beyond the 2 per cent threshold, considered 'on the rise' until last month, are now 'balanced', which in central bank jargon it means “under control”. Therefore, given this 'significant change', the ECB has decided not to touch the reference rates.
Small consolation for the financial markets, impressed by the tone used in the press conference by President Jean-Claude Trichet who referred to a "particularly high uncertainty" and "risks for growth". Within a few minutes, Frankfurt's concern infected all the financial markets: Piazza Affari now loses 0,7%, as does Frankfurt. London (-0,48%) and Paris (-0,33%) also fell.
On the other hand, thanks to Italy's approval, the ECB directorate has not transformed as feared into a sort of tribunal against Italy supported, like Spain, by the purchases of BTPs on the secondary market. Indeed Trichet wanted to underline that the measures taken "confirm something that was very important for the governing council, and that is an initial commitment by the Italian government". In addition to being the first, most important result of the pressure from Trichet and Mario Draghi which also relied on the support of the most credible institution: the presidency of the Republic.
This was underlined by the central banker himself, citing a "recent dialogue with the President of the Republic on how decisive the commitment and implementation" of the measures are. Moreover, Trichet added, the warning does not concern Italy alone: 'European governments – he underlined – must immediately and fully implement the recovery measures'. This, together with "a labor market", is the only recipe for getting through the new crisis as harmlessly as possible.
