ECB: Eurozone is not ready for an interest hike9. Juni 2022
Strasbourg, 9 June 2022
At today’s ECB meeting in Amsterdam, the Governing Council of the European Central Bank decided to phase out bond purchases before raising key interest rates by 25 basis points in July.
Rasmus Andresen MEP (Bündnis 90/die Grünen), European Parliament rapporteur for the annual report of the on the European Central Bank, comments:
„We view today’s decision by the European Central Bank to end bond purchases and a rate hike for July with mixed feelings.
The current inflation, caused by disrupted supply chains and high dependence on fossil energy, cannot be tackled with standard prescriptions.
The European Central Bank is not the German Bundesbank. The economic development in the euro zone is very sensitive, and in some countries an increase in interest rates could lead to recession. This would challenge price stability and must be prevented.
ECB President Lagarde must explain how an interest rate hike will affect different regions of the eurozone.
Anyone hoping that a different monetary policy will solve our economic problems is mistaken.
The European Central Bank must not be made the scapegoat for political failures of recent years in the fiscal and energy policy areas, as well as external factors such as the Russian war of aggression in Ukraine. Related to this, drastic interest rate hikes would not address the root of the problem of the current price shock. Massive investment in renewable energy is much more effective in addressing our dependence on Russia and the current explosion in energy prices in one fell swoop.
The social division and rising unemployment – especially in southern Europe – which a hike in the key interest rate can trigger cannot be ignored in this debate.“
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