ECB VP Constancio out with a scheduled speech 17 Oct
- even when mon pol is recalibrated
The world economy is going through a period of sustained moderate growth. In particular, the cyclical recovery in the euro area is now stronger and broad-based, driven by a virtuous circle of employment creation and private consumption. All member countries are experiencing economic growth, the significant current account deficits at the beginning of the crisis in various countries have turned into surpluses, and in public finance most countries previously under stress are now showing positive primary surpluses. Since mid-2013, almost seven million jobs have been created, offsetting the losses during the peak of the crisis and unemployment is at its lowest level since 2008, albeit still quite high. Business confidence is the highest in a decade suggesting that we can expect a continued and resilient recovery in the coming quarters. These developments were and are still strongly supported by the ECB's expansionary monetary policy after the second recession in 2012-2013.
Notwithstanding these developments, there are concerns regarding possible financial instability stemming from international market developments that could lead to price corrections. Signs of general overvaluation in asset prices are however not present in the euro area. There are localised asset price pressures in a few national housing markets and, in particular, in the commercial property market. As a result, several countries have adopted macroprudential policies and are dealing successfully with those tensions.
The overall financial stability situation in the euro area is therefore positive and well underpinned by the improved fundamentals of our economies. Improvements indicate that the euro area is now much more resilient and better prepared to cope with potential financial shocks that may very well happen in the near future
Full speech here
