IMF: well a reform of the labor market in Italy – Il Sole 24 Ore

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This article was published on 7 October 2014 at 17:08.
The last change is the 7 October 2014 at 17:09.

WASHINGTON – The reform of the labor market in Italy is the road to take when it comes to structural reforms needed to unlock the economic outlook. “I like his spirit,” says Olivier Blanchard sull’outlook press conference on the sidelines of the global economy of the International Monetary Fund, an outlook that reflects both the American Recovery that weakness rather painful Europe.

“The dualism of the labor market is a serious problem – still the chief economist of the IMF – Because it creates two classes of citizens, an outcome clearly undesirable. It seems to me that a single contract is the way to go. “

Blanchard, at a press conference, he painted a picture still full of challenges throughout the global economy. “The recovery continues but is weak.” Even more so, he says, when you consider that the downgrades of percentages, if there are small “departed from data already low.” This weakness, however, there are countries that “have almost recovered” and others who “are still struggling.” Work there are two forces to be reckoned with: the legacy of the financial crisis, debt and unemployment. And for the future, the challenge presented by a potential for growth that was lower than in the past and that also affects negatively the current choices, spending and investing.

The area Eero “is almost stationary” Blanchard said, with weakening even in key countries. This’ also one of the three major risks for the entire global economy, we also include a “possible excessive willingness of financial markets” and geopolitical tensions, “Ukraine and the Middle East. A downturn in the European recovery is the third big question: is not part of the most likely scenario, but there is the specter of a fall in demand and deflation.

The risk implications of “policy” . For the advanced economies need to face all of the legacy ‘of the crisis passed, such as household debt, through accommodative policies and low interest rates. And a tax policy that needs to see how “justified investment in infrastructure.” If it materializes paralysis, moreover, must be prepared to do more. It also serves to answer the problem of growth potential for the future, which could be less than that of the last decade. For this we also need “specific structural reforms, identified by country,” says Blanchard offering a general rule that when dropped in the Italian did highlight the labor reform.

“The challenge for policy makers and ‘to restore confidence, “he said. On the ECB said that the plan to purchase asset-backed securities “can make a difference ‘and that, in Europe, the” case in favor of plans for investment in infrastructure is very strong. “

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