New measures promised by the
European Central Bank (ECB) could, if fully applied, boost
Italy's gross domestic product (GDP) by 0.5%, "a considerable
sum," Bank of Italy Governor Ignazio Visco said Thursday.
That could be a boon for the economy that slipped into
recession in the second quarter, Italy's third such downturn
since 2008.
Speaking to a meeting of the Eurofi financial forum, Visco
said that "the heart of the problem" plaguing economies in
Europe is very weak demand and low investment.
What's needed from government is to "create a more
favourable environment" to kick-start private and public
investment in Italy and Europe, he said.
The need is great, he said.
Since the start of the global financial crisis in 2007,
public and private has plummeted by 20% across Europe and even
worse, by as much as 25% in Italy, said Visco.
Last week, the ECB unveiled new measures to try to boost
economic growth including changes to its interest rates and the
purchase of asset-backed securities.
Those measures, as well as earlier commitments by the
central bank to increase loans to commercial banks, are designed
to encourage those banks to, in turn, increase loans at
reasonable terms to business and consumers.
Visco said governments must do their part, along with
central bankers, in boosting economic expansion.
While Italy has slipped into recession, other European
economies including Germany - the eurozone's largest - are also
struggling with sluggish demand, low growth and weak inflation.
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