BERLIN output complicates the crisis in Europe. The president of the European Central Bank (ECB), Mario Draghi, admitted yesterday that the recovery remained “weak, fragile and uneven” three daunting enough adjectives at this point, after a long decline. But it also warned that geopolitical risks, with the conflict in Ukraine as the main threat to eurozone pose new risks for the recovery.
also acknowledged a slowdown in recent months. “The growth momentum has slowed. Available information remains consistent with our assessment of the continuation of a moderate and uneven economic recovery in the euro zone, with low inflation and money growth and slower credit,” he said after Draghi meeting of the governing council of the Bank, which, as expected, kept borrowing costs at a record low of 0.15%.
Monetary policy stimulus will remain so for a while, moved the banker Italian, under the circumstances. “The greatest geopolitical risks can it have a negative impact on economic conditions, either higher or threats products eurozone energy prices,” he said in the press conference.
Although public interventions Italian banker are marked by a strict diplomatic language and usually avoid mentioning full names dangers that threaten the eurozone yesterday Draghi did say the name of the countries that can end the slow economic recovery Eurozone. “There is no doubt that if the world is observed today, geopolitical risks have increased, there are crises in Russia and Ukraine, Libya, Iraq, Gaza …” he said, and admitted that some of these risks, as the crisis in Russia and Ukraine will affect more to the European Union, although admitted it difficult to quantify the impact of “sanctions of part and contrasanciones the other”, as restrictions on imports from the EU.
The European recovery has encountered a slowdown in Germany and another double dip of its major economies, the Italian, and the pattern of European monetary policy was silent not to discuss the economic crisis facing the which is his home country. Draghi said the low level of private investment, the lack of reforms in the labor market and the high uncertainty in the Italian political course had caused the latest crisis. “There is a difference between countries that have implemented structural reforms and those who have not been completed or not,” he said in a critical tone.
Draghi, however, had positive comments to refer impact they have had in the eurozone unconventional measures adopted by the ECB in the past to boost the economy and promote lending. The banker said the ECB Governing Council unanimously supported the commitment to use unconventional measures if necessary to address risks of too long a period of low inflation.
ECB President He said that Tltro (refinancing operations long term) will be launched in September should help alleviate the conditions of additional financing and stimulate lending to the real economy. The ECB expects liquidity auctions long-term amount to between 450,000 and 850,000 million euros and is working on preparations to revive the purchasing program packages loans to SMEs (ABS, as the acronym.)
The shadow of deflation has not finished erasing a eurozone whose latest CPI data, for June, shows a slight 0.4%, compared to a nearby but less official target of 2%.
The ECB president also recalled that the Council are unanimously agreed price outlook in the eurozone, it will remain low during 2014 and is not expected to lift until 2016 “It is due to the fall of energy prices, “said Draghi, who said the other components were stable.
also answered by one of the last European upheavals, the intervention of Banco Espírito Santo (BES), Portugal . Yesterday, the Portuguese government confirmed that credit from public funds will be reduced to refloat the new BES 500 million to 3900 million, an additional contribution of banking, which puts more borrowed money, reports Javier Martin. Draghi rejected the chance of infection by this problem. “This is an episode that is being contained, not a systemic incident,”
However, the BES is one of the factors most, along with weak economic data and the risks of Ukraine, which led the stock to close another day with falls: 1.64% in Madrid, Milan 1.94% and 1% in Milan by incertidumbre.ß .
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