-Stefan Ingves, Riksbank Governor
While Greece is within a hair's breadth of a massive default and European finance leaders are trying to avert the worst-case scenario, the unemployment rate in Greece remained at an unhealthy high level. The jobless rate was 25.8% in November, unchanged for the preceding month. One of the pre-election pledges of Alexis Tsipras, Greece's Prime Minister, is to implement labour market reforms, which include restoring wages, reinstating pensions and ending layoffs. The minimum wage will gradually increase to 751 euros a month from 586 euros now.
Meanwhile, an unexpected move came from the other side of Europe, where the Swedish Riksbank cut interest rate and deployed quantitative easing to combat deflation. The central bank cut its main repo rate by 10 basis points to –0.1%. On top of that, the bank announced it will buy SEK10 billion ($1.2 billion) worth of government bonds, to further ease monetary policy. The Riksbank also hinted that it stands ready to make monetary policy even more accommodative, in case economic conditions deteriorate further. Another piece of data showed no improvement in the Euro zone's industrial production in December, following the downwardly revised 0.1% growth in the prior month. On an annual basis, industrial output declined 0.2% working-day adjusted, after November's downwardly revised 0.8% contraction.
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