Last summer’s announcement of the implementation of the Outright Monetary Transactions or OMT programme by the European Central Bank (ECB) has gone a long way in reducing tensions on the sovereign debt market, according to Dexia Asset Management (DAM) report.
“Activity, nonetheless, has continued to weaken. All domestic growth engines have stalled. And, companies’ perception of weak demand makes a prompt rebound in their investments highly unlikely,” according to 
“All the more so as lending conditions for companies, particularly SMEs, keep worsening. Finally, on the job market, the situation, which is going from bad to worse, is taking its toll on consumption.
“This comes as no surprise to me and the fact that the public and the private sectors are deleveraging simultaneously has, in recent years, implied an improvement in current balances at a time when the rest of the world stopped supporting our exports!” If the governments and the European Commission have finally accepted less ambitious deficit-reduction objectives, structural adjustment efforts remain the same. In the peripheral countries, however, private-sector spending behaviour is unlikely to support growth in the short term… and it could turn less favourable in some of the “core countries”. On average in 2013, activity should continue to contract by 0.5% and growth should remain weak in 2014, rising by scarcely 0.6%,” Florence Pisani, said.
“If there’s no change in strategy, activity will remain precariously weak and the risk of falling into the austerity trap will become a real one for a growing number of countries in the zone.” So far, although the ECB has certainly been adventurous and will keep doing whatever is needed to save the euro… there’s little else it can do to kick-start business activity,” Florence Pisani, added.