Learning Paths » 5A Interacting
CTullis - The European Central Bank's Letter. Structural analysis
by - (2011-10-04)
Up to 5A - The European Central Bank's Letter
The present text is a formal letter written by the Governing Council of the European Central Bank, namely by Jean-Claude Trichet and Mario Draghi, to the Italian Prime Minister.
The letter is composed of three paragraphs. The first paragraph goes straight to the point introducing the reason why this letter was written. Its purpose is to convince the Italian Prime Minister to act as soon as possible to restore the confidence of investors, because the Italian economic situation is in a difficult position.
In the following paragraph the writers pose their thesis: Italy needs to underpin the standing of its sovereign signature and its commitment to fiscal sustainability and structural reforms. There is also a statement to convince that actions must be immediate : the fiscal package introduced by Italy to a balanced budget in 2014 is not sufficient.
In the third paragraph the reader finds a list of essential measures to be taken. There are three points. The first point deals with the competition increase, particularly to improve the quality of public services, the fiscal systems and the labour market. After this the Governing Council make an explanatory list with other three points (from A to C) to present types of interventions. First of all is essential to make a reform strategy, secondly to reform the collective wage bargaining system, thirdly to review the rules regulating the hiring and dismissal of employee. The second point is about the method to do an immediate and bold measure to ensuring the sustainability of public finances. In this point there are other three explanation points, too: it is very important to add corrective fiscal measures, to introduce an automatic deficit reducing clause and to place under tight control borrowing. The third paragraph include an encouragement to take immediately the measures described in point 1 and 2 and another essential need to be taken: take measures to ensure a major overhaul of the public administration.
In conclusion the Governing Council write his encouragement: they trust the Italian Government will take all the appropriate actions.
The letter is composed of three paragraphs. The first paragraph goes straight to the point introducing the reason why this letter was written. Its purpose is to convince the Italian Prime Minister to act as soon as possible to restore the confidence of investors, because the Italian economic situation is in a difficult position.
In the following paragraph the writers pose their thesis: Italy needs to underpin the standing of its sovereign signature and its commitment to fiscal sustainability and structural reforms. There is also a statement to convince that actions must be immediate : the fiscal package introduced by Italy to a balanced budget in 2014 is not sufficient.
In the third paragraph the reader finds a list of essential measures to be taken. There are three points. The first point deals with the competition increase, particularly to improve the quality of public services, the fiscal systems and the labour market. After this the Governing Council make an explanatory list with other three points (from A to C) to present types of interventions. First of all is essential to make a reform strategy, secondly to reform the collective wage bargaining system, thirdly to review the rules regulating the hiring and dismissal of employee. The second point is about the method to do an immediate and bold measure to ensuring the sustainability of public finances. In this point there are other three explanation points, too: it is very important to add corrective fiscal measures, to introduce an automatic deficit reducing clause and to place under tight control borrowing. The third paragraph include an encouragement to take immediately the measures described in point 1 and 2 and another essential need to be taken: take measures to ensure a major overhaul of the public administration.
In conclusion the Governing Council write his encouragement: they trust the Italian Government will take all the appropriate actions.