for which detailed information is not yet available. business surveys continue to be favourable overall, but there are signs that the trade tensions could lead to a revision of investment plans. this is also why a deterioration of funding conditions in the economy stemming from higher interest rates on public debt must be avoided. in a country such as italy, where the pace of growth is already slow and has been below that of the euro area for many years now, a further slowdown in economic activity would be felt more deeply than elsewhere. fiscal policy has limited room for manoeuvre to compensate for a possible contraction in private demand. in this context, priority should be given to measures that incentivize investment in infrastructure, both material and immaterial, and labour market participation. resources should be concentrated on measures that are clearly directed at supporting economic activity effectively. the common monetary policy responds to the situation of the euro area as a whole. last week the ecb ’ s governing council, in view of ongoing economic growth and of the gradual increase in inflationary pressures, reiterated its intention to end the net asset purchases at the end of this year. however, taking into account the uncertainty surrounding the outlook for the world economy and for financial markets, as well as the need to support price dynamics in the medium term, the council has confirmed that it intends to continue to provide significant monetary stimulus. even after the end of the net purchases, this support will arise from the sizeable stock of assets in the eurosystem ’ s portfolio, the reinvestment of the principal as these securities mature and the indication that the key ecb interest rates will remain at their present levels for as long as necessary. monetary policy normalization is a very delicate process, as the experience of other countries has shown. as i have observed in the past, the italian economy can withstand an end to the low interest rate regime with no risk to economic activity or the public finances, provided that fiscal policy remains anchored to stability and that the reform process aimed at strengthening the economy continues. growth potential the growth gap between italy and the rest of the euro area is a structural problem that cannot be resolved through monetary stabilization policies or by an expansionary fiscal stance. its main cause is the low productivity of firms which have lagged behind in responding to the drastic technological changes that began a quarter of a century ago. in this period italian firms have generally not been sufficiently innovative and have grown very little. in addition, italy has an older population than other countries

. the role of banks and other financial intermediaries is to support and encourage the economy to change and grow. to do this in full they must respond effectively to the challenges posed by technological developments by updating products and production processes, keeping costs down, increasing efficiency and investing in knowledge and staff training. they must continue to nurture their customers ’ trust through transparent and virtuous behaviour, thereby proving that banks and finance are not the ‘ enemies ’ of saving and savers, but rather support them both, for the benefit of the economy. at the same time, banks must not be placed at a disadvantage vis - a - vis international competition. financial tensions over public debt would ultimately damage banks ’ capital adequacy and compromise their access to capital markets, with serious consequences for the economy, for savings and for the well - being of italians. the protection of savings, like the fight against poverty, calls for the economy to return to lasting growth. the necessary reforms and changes may incur social costs in the short term that have to be alleviated, including through public intervention. this can be discussed at european level : where applicable, all the margins available under the current rules and procedures can be used. nevertheless, differences of opinion should not lead to an institutional conflict. the financial consequences of a temporary increase in the budget deficit can be mitigated if the necessary adjustment path is drawn up and managed in a climate of open and constructive dialogue, within the framework of the existing procedures. in 2019, almost €400 billion of government bonds will have to be placed on the market to finance those coming to maturity and to cover the deficit for the year. reciprocal trust is essential if the reform of european economic governance is to be resumed and completed. problems and challenges have taken on a global dimension in the third millennium and it is unrealistic to think they can be faced within the close confines of individual countries. it is for this reason that italy ’ s future cannot be separated from that of europe as a whole. figures figure 1 sovereign risk premium : italy, spain and greece ( yield spreads for ten - year government bonds with respect to the german bund ; basis points ; daily data ) italy spain greece jan. 15 july 15 jan. 16 july 16 jan. 17 july 17 jan. 18 july 18 source : based on bloomberg data. figure 2 premiums for default and redenomination risks on italian government bonds ( credit default swaps ; basis points ; daily data ; 5 -