The ECB’s monthly bulletin argued that “no tangible progress” had been made by successive Italian governments toward the European Commission’s aim for a balanced structural budget. The report added that the Italian authorities should focus on “putting the debt-to-GDP ratio on a downward path”.
Yet some analysts are positive about Renzi’s reforms, which include cutting income taxes by €10bn (£8.35bn). “We think that Italy should refrain from easing its current fiscal policy stance even if that means keeping the general government budget deficit within three per cent of GDP,” said Barclays analyst Fabio Fois, adding that more could have been done on corporate taxation.
Meanwhile in Greece, unemployment arose again at the end of 2013, according to an official release yesterday, reaching another record level and raising questions about government suggestions that the country will emerge from recession this year.
The average unemployment rate in Greece was 27.3 per cent across the whole calendar year, up from 24.2 per cent during 2012.
French and Italian inflation figures were also announced yesterday morning: France’s figure was above expectations, with consumer prices rising by 1.1 per cent in the year to February. Italian prices rose by only 0.4 per cent in the same period, marginally below what was predicted.
BNP Paribas now suggests that inflation in February, which was estimated by the European Commission to have been 0.8 per cent, may be revised downward slightly.
“We still think inflation will continue to moderate in March, to 0.6 per cent. This is likely to be due to some seasonal price increases being postponed from March to April, with Easter falling late this year,” said the bank’s Gizem Kara.