Each week, the Economic Research Department of BNP Paribas reports on economic news.
The European Central Bank came out swinging this week, to the point that it even risks feeding the sentiment that this time it might have thrown its last weapons into the battle. Key rates cuts, a stronger Quantitative Easing programme and new long-term refinancing operations: there is no time to wait and see, but instead everything possible must be done to accelerate the recovery of lending, activity and, in turn, prices.
Unfortunately, the sense of urgency is not the same in Brussels and Frankfurt. The European Commission presented this week a summary of the indepth reviews of twelve Eurozone countries that risk experiencing macroeconomic imbalances. Although presented differently, the Commission’s basic observation is identical to that of the ECB when it notes that “the Eurozone currently shows one of the world’s highest current account surpluses.” Even so, the procedure will advance at the slow pace we’ve grown accustomed to expecting from European institutions, and will be based on “a strengthened dialogue with the national authorities”. In addition, while France, Italy and Portugal are just one notch away from triggering disciplinary procedures, Germany and the Netherlands are seen in a less severe light, even though their current surpluses have exceeded the 6% threshold since 2012 and 2009, respectively. Their imbalances were not found to be excessive by the Commission services, although their situation “might indicate excessive domestic savings with regard to investment…”
Frédérique Cerisier
See the video : ECB: Big package in March
