When many economists were predicting that oil prices would go above 100 dollars a few weeks ago, that had me worried. But the current level is good for growth in the euro area. How big are the problems in Italy, in your view? Financing conditions there have tightened.
Short-term rates have remained low, but longer-term rates have risen considerably, and stocks are under pressure – especially those of banks, which have fallen by more than 30%. Banks will eventually have to pass on the tighter conditions they are facing to customers. Our estimates show that this will offset – possibly more than offset – any positive impact resulting from higher government spending.