The ECB’s approach and Unimpresa’s concerns
The current conduct of the European Central Bank (ECB), based on decisions made from meeting to meeting and on variable data, is creating uncertainty in financial markets and the real economy. Giovanna Ferrara, president of Unimpresa, has expressed concern about the lack of clarity in the ECB’s monetary policy strategies, highlighted in the minutes of the last Governing Council meeting on June 5 and 6.
Ferrara emphasized that uncertainty is the worst enemy of markets: “The ECB’s statements, which avoid committing to a particular path for interest rates, do not provide certainty to investors and businesses. This uncertain environment can hinder investments and long-term planning.”
The effects on credit access
According to the Unimpresa Study Center, the slowdown in business loans is a worrying sign. In May 2024, the growth of loans to non-financial corporations in the euro area fell to 2.1% year-on-year, compared to 3.2% in December 2023. This deceleration reflects a climate of caution among banks, concerned about economic conditions and potential defaults.
High interest rates, maintained for a prolonged period without clear indications of when they might be reduced, increase the cost of credit for businesses. This can lead to a credit crunch, with negative effects on the liquidity and growth capacity of companies. Already in 2023, about 45% of SMEs in the euro area reported difficulties in accessing credit, a percentage likely to increase if uncertainty persists.
The need for clear and precise communication
Ferrara also emphasized the importance of clearer communication from the ECB: “A data-dependent approach requires much clearer and more precise communication to avoid fueling uncertainty in the markets. It is essential that the ECB provides clear indications on the future trajectory of monetary policy, establishing defined parameters for interest rate decisions.”
Greater transparency would help stabilize inflation expectations and provide businesses and investors with the necessary information to make strategic and informed decisions. Ferrara concludes: “The market needs precise indications and a well-defined trajectory for monetary policy.
