The Italian Prime Minister and her deputies have slammed interest rate hikes by the European Central Bank (ECB) – with Matteo Salvini describing the moves as ‘senseless’ and harmful to families and businesses, while Meloni warned the cure might do more harm than the illness.
Prime Minister Georgia Meloni today said that the ECB was following a “simplistic” policy approach that could do more harm than good.
“It’s right to decisively fight inflation but to many people the simplistic recipe of rate hikes followed by the ECB doesn’t seem to be the right path,” Meloni told parliament, according to Reuters.
“We must consider the risk that the constant increases in interest rates hurt our economies more than inflation, that the medicine ends up doing more harm than the illness,” she said.
The ECB moved to raise euro zone interest rates to their highest level in 22 years this month and warned that another hike – the ninth in a row – would likely come in July as inflation remained stubbornly high.
Deputy Italian PM, Antonio Tanjani, also said he was disappointed by the hike announced by Lagarde and warned against the risk of recession caused by too high rates.
Tajini said that rising interest rates would impact negatively on growth. Eurostat figures last month showed the zone showing lower growth than expected after a period of stagnation
“I don’t think it is in the interest of growth to keep raising interest rates”, Tajani said.
His fellow deputy, Matteo Salvini, who is also Minister of Transport, described the ECB’s decision to continue hiking up interest rates as “senseless and harmful” as well as being against families and businesses.
“Does Lagarde have a variable-rate mortgage? Does she know how much the instalments are increasing? Who benefits from these absurd decisions?” Salvini asked, saying that he had asked for a meeting with the Italian representative on the ECB board “to discuss the problem and analyse solutions”, according to EUACTIVE.
“We suffer from inflation that is not due to an internal fact, like in the US. In that case, yes, it is right to raise interest rates”, he added.
“Raising the cost of money means putting businesses in difficulty. Entrepreneurs who want to invest give up their projects and wait for better times”, he said.
Earlier this year, Bank of Italy governor, Ignazio Visco openly criticised his ECB colleagues for making statements about future increases in borrowing costs when it had been had agreed not to give such guidance.