MILANO – “It is of fundamental importance that the Next generation Eu becomes operational without delay, as it would allow member states to restart their economies, strengthen their resilience and fuel innovation”. Thus the vice president of the ECB, Luis de Guindos, urges member countries to speed up the implementation of the Recovery fund, on which the verdict of the German judges and the discussion on financing through the issuance of Eurobonds are still pending. His announcement gave the markets the vision of a Europe that is finally compact in response to the crisis, but now “we must avoid any avoidable delays that could undermine this very positive perception of what has been achieved”.
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According to the forecasts of the central institute, he added, the Eurozone economy “should recover in the second half of the year thanks to vaccinations, reopening and fiscal and monetary policy in the Eurozone and in the rest of the world, but it will be a recovery. fragile”. The point of recovery to pre-pandemic levels is set for mid-2022 but “the success of the vaccination campaign in the entire euro area – said de Guindos – is crucial to prevent downside risks from materializing”.
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De Guindos intervened on the occasion of the presentation of the annual report of the central institute, which indicates how the European plan for the restart can provide significant macroeconomic support of about 5% of the GDP of the euro area if used fully. About two thirds of transfers to states are destined for six countries with a debt / GDP above 100% (including Italy, which has the second highest debt in relation to the GDP of the monetary area). As done by many institutions, the ECB also remarked that at this stage the risks associated with a premature withdrawal of aid to the economy continue to prevail over those associated with maintaining them for too long, however, looking ahead “the authorities will have to face a delicate evaluation task “of these two equilibria.
But the ECB itself also played a role, as emerges from the president’s introduction to the document, Christine Lagarde: “The monetary policy response has played a crucial role in stabilizing the markets and helped to avert the severe risks posed by the pandemic to the monetary policy transmission mechanism, the outlook for the euro area economy and, in last resort, to the objective of price stability pursued by the ECB “.
In a scenario with “low” but “high vulnerability” risks to financial stability, as the vice president said, the report notes that fiscal measures to support the real economy in 2020 have protected the banks from most of the losses on their loans and it will be “crucial” to continue to ensure the effectiveness of this aid. However, if on the one hand the European banking sector appears to be sufficiently capitalized to cope with the stress induced by the pandemic, on the other “the authorities must be ready for further measures if a very serious scenario should materialize”.
Before the presentation of the report, the Central Bank had also released the results of the consultation on the introduction of a “digital euro” from which it emerged that with a percentage of 47% of the
answers from Germany, the Germans were by far the most interested in the topic: behind them Italy (15% of the answers) and France (11%). “What the public and professionals want most from such a digital currency is privacy (43%), followed by security (18%), the ability to make payments across the euro area (11%), no additional cost (9%) and the possibility of offline use (8%) “.
The consultation started on 12 October 2020 and ended on 12 January 2021, receiving over 8,200 responses: a record attendance for an ECB public consultation. “A digital euro can only be successful if it meets the needs of Europeans”, commented Fabio Panetta, member of the Executive Committee of the ECB. “We will do our best to ensure that a digital euro meets the citizens’ expectations highlighted in the public consultation.”
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