Italy, Netherlands most exposed if aid is withdrawn – ECB – UK | Instant News

(ANSA) – ROME, 25 NOV – The European Central Bank (ECB) said in a report on Wednesday that abruptly ending support measures brought in due to the COVID-19 pandemic could cause a cliff edge effect on household and corporate incomes , with a direct impact on economic activity in 2021, added that Italy and the Netherlands are the EU countries most exposed to this risk.
“Countries that rely more on moratoriums, direct support and tax breaks appear to be more affected by the bluff in policy support for 2021,” the ECB said in its Financial Stability Review.
“In the largest euro area countries, simulations show that such an effect will be most pronounced in the Netherlands, mainly due to the withdrawal of most direct support coupled with the end of tax breaks and short-term employment schemes.
“Likewise in Italy, the simultaneous end of a large part of the loan moratorium, exit from short-term work schemes and the end of direct support would indicate a substantial decline in support for recovery by 2021”. (ANSA).