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This article was published on September 4, 2015 at 8:22.
The last change is the September 4, 2015 at 08:24.
Frankfurt. The European Central Bank is ready to a new monetary stimulus if the deterioration of the European economy, outlined yesterday by cutting the forecasts for growth and inflation, it should prove to be more than temporary. ECB President, Mario Draghi, spoke clearly of “the will and ability to act” on the part of the bank and the possibility of change, “the size, the composition and duration of the program” to buy any securities launched six months ago, so-called quantitative easing (Qe).
Two factors weigh on the evolution of the eurozone: the slowdown in China and other emerging countries, which weakened the recovery, and the further decline in oil prices, which It was the main cause of inflation lower than expected. In the coming months, in fact, this could return to negative territory and year-end will be placed only 0.1%. Today it is 0.2%, against a target of being below but close to 2%. Forecasts spread yesterday, the ECB now sees inflation in 2017 to 1.7%, compared with 1.8 in June indicated. The risks are to the downside, Draghi noted, stressing that the new forecasts of economists from the ECB have been made before the middle of August and thus do not take into account the events of recent weeks. Among these, the restrictive financial conditions.
In the face of this situation, Draghi made it clear that the ECB will continue close monitoring, but also preparing to take action if necessary. If this is for now “premature,” ECB President did not show, however, want to return too possible interventions that strengthen the Qe. “We have not yet,” he said, answering a question about the type of measures: these could include for example an extension beyond the deadline originally scheduled in September 2016, a possibility mentioned explicitly for the first time by the Dragons, or an increase monthly purchases of securities, today to 60 billion euro. A small signal, albeit technical, of his determination to ensure that the face Q and its effects, the board of the ECB gave announcing that the purchase limit for each individual issue is brought from 25 to 33%. This does not alter the amount of monthly purchases but should facilitate the operation of Qe. “The technical details will not prevent the implementation of the program,” noted Dragons.
The ECB President has noted, however, that the effects of monetary stimulus begin to appear in the credit market, with a gradual, albeit still very modest pickup in lending to businesses and especially with improved conditions: has narrowed the spread between companies in different countries, but also the disadvantage that small and medium-sized enterprises. All in all, thanks to the improvement of the credit, the resilience of consumption and the fall in unemployment, the home front to the ECB now seems less problematic than the outer one.
It’s been rather a time into the background theme which dominated the last meeting, that the Greek crisis. Draghi confirmed that it was at the insistence of the ECB, which feared counterproductive in a country that had experienced massive flights from bank deposits, they have been exempted from the bail-in, that is the involvement in the rescue of the banks, to prevent damage to savers, but also to businesses. The ECB will want to wait the implementation of the first measures of the program by Athens before reintroducing the exemption that allows Greek securities to serve as collateral for financing operations with the ECB itself. Their purchase based on Q and is also yet to come. Meanwhile, Greek banks continue to have access to emergency funds Ela, who this week have been reduced by 100 million euro, a signal timid normalization. It is clear, however, that the situation in Greece is under scrutiny of the ECB that at the moment is completing, in its role as supervisor, the analysis of banks to assess the need for recapitalization.
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