De Guindos (ECB), ahead with reforms, 2-speed EU risk
The ECB is “ready to recalibrate unconventional measures and its pandemic programs”, provided that there is awareness that Frankfurt is not “omnipotent”. For this reason, “the main antidote will not be monetary policy, but the reform and budgetary action of governments”. This was stated by ECB vice-president Luis De Guindos, in an interview at the opening of the press in which he warned about the risk of a two-speed Europe and urged Italy to be more competitive. “Monetary policy is not the only weapon available to us. This time the first line of defense was national budgetary policy. It went well, but the response was asymmetric, because the action cannot be the same everywhere and not all countries have the same room for maneuver, “notes De Guindos. “That’s why I think a pan-European tax response is so important. To avoid a two-speed restart ”, which is“ the most worrying element ”, underlines De Guindos. This is why “a complete monetary union, a true banking union, a single capital market and a joint fiscal instrument are needed”. As for Italy, “the problem is primarily linked to the growth that was already close to zero even before the coronavirus. It’s a question of productivity, competitiveness and structural reforms to complete, “says De Guindos. “At this stage of the crisis, national fiscal policies must be expansive. In the short term there is no alternative, if not to spend. But once the emergency is behind us, all countries with a high level of debt – and not only Italy – will have to start tackling the problem of sustainability in the medium term and respect for community parameters “.