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News Link • Employment & Jobs

Eurozone unemployment hits record high

• www.ft.com
Attention is back on the ECB’s role in helping the eurozone emerge from its debt crisis, after last week’s EU summit agreed that the central bank should play a role in common bank supervision. Leaders also backed the view of Mario Draghi, ECB president, that eurozone bailout funds should be offered directly to recapitalise struggling banks.
 
Few analysts expect the ECB to offer politicians a quid pro quo this week by giving further direct support to banks or governments such as more cheap loans or bond buying. But markets are pricing in the likelihood that the ECB will respond to worsening economic data by cutting its main policy rate to below 1 per cent for the first time – a step that should help peripheral eurozone banks that rely on central bank borrowing.

“A rate cut by 25bp almost looks like a done deal,” said Carsten Brzeski, senior economist at ING in Brussels, in research published on Monday.

Mr Draghi has voiced alarm at increased risks to the economic outlook and some economists think the central bank could consider a more aggressive rate cut of 50 basis points.


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