ECB measures could boost Italy's GDP 0.5%Staff writer ▼ | September 15, 2014
The head of Italian central bank Ignazio Visco said Italian GDP could increase by 0.5 percent if the new measures promised by the European Central Bank (ECB) are fully applied.
New measures The head of Italian central bank Ignazio Visco
Such a growth of GDP would be a "considerable sum," Mr. Visco said in a meeting of the Eurofi financial forum held in Italy's business capital Milan.
The ECB announced new measures last week aimed at encouraging growth, including changes to its interest rates and the purchase of asset-backed securities, besides earlier commitments to increase loans to commercial banks.
"The heart of the problem" at the roots of the European economic crisis, Mr. Visco said, is weak demand and low investment. He called for urgent creation of a more favorable environment to "re-launch public, private, national and European investments to kick-start recovery," and stressed that national governments must take efforts along with bankers.
Mr. Visco noted that since the outbreak of the global economic crisis in 2007, public and private investments have fallen heavily by 20 percent across Europe, and even worse in Italy. He said Italy, the current EU rotating presidency, has put the investment issue high on its agenda. The country slipped into its third recession since 2008 in the second quarter of this year.
The ECB said Italy risks missing its target of bringing its deficit-to-GDP (gross domestic product) ratio down to 2.6 percent this year, and called on the country to start bringing down its huge public debt, more than 130 percent of GDP. ■