BoAML | The ECB has closed many doors in December. The 2015-16 strategy of monetary policy covering for fiscal loosening to facilitate structural reform has changed.We are back to national governments having to navigate through strained fiscal trajectories, leaving very little room for mistakes. Potential growth prospects are not great, not only in the periphery.
“In principal, the euro is a good idea. The aim is to create a big economic space without any monetary barriers, like the US. But a common space implies that member states are prepared to take each other into consideration as far as their economic, financial and wage policies are concerned,” says Peter Bofinger, one of the five ‘wise men’ who make up the German Council of Economic Experts.
Banks have to do more to fuel growth. Even though they can’t be blamed for the fact that even the European growth rate potential is below 1% (1.5% growth forecast for the whole year). Confidence: that is what the authorities should be transmitting to the banking sector. And more regulatory clarification, so that uncertainties will be eliminated in the future.