Stressed economies are also those where investment has decreased the most.8 As a result, the average unemployment rate now stands above 18% on average for the group of countries hit by financial stress,9 whereas it is below 8% on average in non-stressed countries. Interestingly, these average unemployment rates were essentially the same before the financial crisis. Against this background, what can European institutions do?
The ECB has reduced its key interest rate, the rate at which banks refinance themselves every week, to a historic low of 0.25%. We have said that, in view of the subdued outlook for inflation, we expect interest rates to remain at current or lower levels for an extended period of time.