ECB: European and Italian economic perspectives

Outlook on Italy worsens, in a general optimistic view on the Euro area, ECB reports, with a cumulative borrowing requirement of €51 billion (3.3% of GDP) in Italy, up from almost €28 billion (1.8% of GDP) in the same period of 2012. The deterioration “highlights the increasing risks surrounding the achievement of the 2013 general government deficit target (2.9% of GDP)” and is mainly owed to the provision of financial sector support, the repayment of arrears, the possible revenue loss (of about €2.4 billion, i.e. 0.1% of GDP) due to the abolition of the first installment of the tax on owner-occupied dwellings for 2013. Higher taxes are announced for compensation.

While the income of families sink to the level of 25 years ago, a long lasting recession scores an average -2,5% of yearly GDP, spread between Italian and German bunds keeps on growing, and consumptions are lower than ever, the effect on development of the past two “technical” government supported by the bipartisan alliance among Mr. Silvio Berlusconi, Mr. Mario Monti, and Mr. Enrico Letta is far to see yet… However, they regularly repeat to “see a light at the bottom of the tunnel”.