Photo: Ibrahim lujaz on Flickr
The European Central Bank used the phrase “particularly high uncertainty” (or a similar variant) seven times in today’s monthly report.That said, not all the news is bad. Productivity is increasing, expected GDP growth has been revised up in the short term and trade deficits might be on the decline. (Except in Italy.)
Will Italy sink the boat?
GDP for the eurozone grew by a respectable 0.8% in the first quarter. In particular, domestic demand seems to be staging a comeback.
labour productivity on the whole is higher than it's been in years -- but not everywhere. According to Eurostat, labour productivity in Italy has declined in 12 of the last 15 years. But productivity has been on the rise in Spain while steady in Germany and France.
The ECB finds the biggest risks to growth to be austerity, fiscal tightening, poor performance in US & emerging markets.
But austerity cuts continue anyway.
The ECB is continuing its call for the speedy implementation of IMF/EU policies in Greece, Ireland, and Portugal.
The report seconded ECB President Jean-Claude Trichet's August 7 statement, insisting that governments should expedite adoption of Greek bailout measures and stand behind the European Financial Stability Facility.