The euro area economy is gradually recovering and a “marked improvement is expected in the second half of 2021, as progress in vaccination campaigns allows for further easing of containment measures”. The ECB writes this in the economic bulletin, which notes that “at the same time uncertainties remain”. In particular, “the ongoing pandemic, with the spread of variants of the virus, and its implications for economic and financial conditions continue to represent a source of downside risks”.
Furthermore, euro area inflation has increased in recent months “mainly due to base effects, transitory factors and an increase in energy prices” and the trend will continue in the second half of the year but forecasts indicate “a gradual increase »Over the medium term.
The ECB, therefore, underlines that a “very accommodative” approach to monetary policy is still needed: market interest rates have increased further and this could result in a tightening of financing conditions which would be “premature and would represent a risk for the recovery. current economic situation and inflation prospects ».
On the business front, Eurotower underlines that “the percentage of SMEs that have resorted to budget support in Spain and Germany was lower, in relative terms, than the corresponding share of SMEs in France and Italy, regardless of the type supporting. In particular, around two-thirds of French companies used public liquidity subsidies to reduce their wages expenditure, while only a third of Spanish companies reported having benefited from this measure. As for the support provided in the form of tax reliefs and moratoriums, one third of Italian companies said they had benefited from it, while in Spain this share drops to 14 per cent. Furthermore, 44% of French companies have also made use of other public support programs, while the corresponding figure for Spanish companies is approximately 21% ».