ECB meeting this week

April 1, 2013 at 9:07 am
 In This Week, Will Not Possible ECB Interest Rate ChangesMeeting Euro Central Bank monetary policy this week looks to be quite interesting to observe.Economic data since the month of March has shown deterioration in the euro zone as well as the decline in private-sector funding, but the ECB is not likely to change interest rates at the ECB meeting this week.These developments indicate the ECB has not revised its economic outlook and may even retain such projections in March, the economic recovery will gain momentum at the end of 2013.The ECB has so far become a political actor in the Euro zone crisis, so that a rate cut will cause a double-edged sword effect. Therefore, pruning flowers will cause debate among the members of the ECB board.If only the ECB cut interest rates there will be the perception that the ECB is making efforts to help the euro zone economic recovery, but on one side of the action will only lead to a contradiction to the ECB's view that structural reforms in the EU is crucial to restore long-term growth.While from Italy reported Euro zone officials predict that Italy is still able to keep the agreement between the European partnet to achieve structural budget balance is supported by fiscal discipline imposed by Mario Monti. However, fiscal consolidation now more uncertain because of the certainty coalition with Berlusconi Bersani highly unlikely.

On the other hand, the manufacturing sector is likely to rise to the depreciation of the euro currency. World financial markets fairly quiet at this time to the development of Italy, largely due to the solid global risk appetite sentiment.Looking ahead, if the government is still struggling to form a coalition and implement programs of structural reforms will eventually be accumulated pressure on Italian bond yields and also to affect other Euro zone region. The scenario looks, Italy finally had to sign an MoU with the Troika and the bond-buying program OMT (outright monetary transactions) from the ECB.