Nonetheless, prudent management of the public accounts has helped to avoid worse scenarios, to first limit and then lower interest rate differentials between euro-area government securities, and to prevent new liquidity crises. It has also proved difficult to implement structural reforms since, while helping to restore the growth potential of an economy, they can have short-term costs, especially in terms of employment.
Between the summers of 2011 and 2012 the Bank of Italy’s assessment of the prospects for growth in Italy last year gradually deteriorated by over 3 percentage points; one point is attributable to the effect of public finance measures, while more than one and a half points  2  BIS central bankers’ speeches  reflects the increase in the spread between Italian and German government securities and its effect on the supply of credit to the economy and on business and consumer confidence; the remainder is attributable to the darkening outlook for world economic growth.