(supersedes previous)The European
Central Bank said in its monthly bulletin Thursday that
backtracking on pension reform in some eurozone countries could
affect productivity and employment.
This could be the case in Italy, Portugal and Spain, where
expectations on productivity and employment could turn out
optimistic as a result of "risks connected to reversal of
adopted reforms", the ECB said.
The ECB also said eurozone economic recovery "should expand
further", with analysts forecasting eurozone GDP growth at 1.55%
this year, 1.9% in 2016, and 2% in 2017.
However uncertainties over Greece and other geopolitical
situations "continue holding recovery back" and have driven
spreads between sovereign paper and their ultra-safe German
counterparts up by 40 basis points in Italy and Spain, and by 60
points in Portugal.
In Italy, the spread between the benchmark 10-year bond and
it German equivalent opened Thursday at 155.1 points, up from
150.3 basis points at yesterday's close.
The yield on Italy's 10-year paper opened trading at
2.315%.
Eurozone inflation is expected to reach 0.3% in 2015, 1.5%
in 2016 and 1.8% two years from now, according to the ECB.
As well, the ECB said its quantitative easing (QE) program
of massive bond-buying is showing "positive results" and will
continue at a pace of 60 billion euros a month through September
2016 or as long as needed.
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