Meloni attacks the European Central Bank: “It moves on rates in a way that many considered risky”

Abroad, where the focus on the government’s guidelines Giorgia Meloni in foreign policy it remains very high, it has not gone unnoticed jab of the President of the Council to the European Central Bank. Speaking to the Chamber this morning, Meloni said: “Low or zero growth, therefore, accompanied by the surge in inflation which exceeded 9% in the euro area and prompted the ECB, like other central banks, for the first time in 11 years, to raise interest rates. A decision considered by many to be risky and which risks having repercussions on bank lending to households and businesses, and which is added to that already taken by the Central Bank itself to put an end, starting from 1 July 2022, to the program for the purchase of fixed-income securities on the open market, creating an additional difficulty for those Member States that have a high public debt ”.

As the agency writes Bloomberg “The attack is the most direct so far aimed at the ECB for the rate hike by a eurozone politician ”. Thursday next is the meeting of the Governing Council of the ECB which should raise the cost of money by another 75 basis points (0.75%), bringing the increase implemented since last July to 200 points. Italy, as the most indebted country in the euro area after Greece, is particularly sensitive to interest rate movements. A higher cost of borrowing means higher interest to be paid on newly issued government bonds and fewer resources to devote to other items of expenditure if you want to make ends meet. Among the main beneficiaries of the government bond purchase programs launched by Frankfurt (quantitative easing), Italy could face turbulence on the markets if the ECB were to reduce its support.

Central banks are raising rates after more than a decade of ultra-expansionary monetary policies, to try to stem inflation. Reducing the quantity of money in circulation, a result that is obtained precisely by raising the cost of loans and financing, is in fact an element that can help curb consumer prices.

More nuanced discontent towards Frankfurt have also been expressed in recent days by the French president Emmanuel Macron and by the Finnish premier Sanna Marin that while alluding they did not expressly call into question the ECB. “I disagree with the main monetary policy stances and with a situation in which central banks they defend their credibility by driving economies into recession“Wrote Marin on Twitter. Unlike that of the Federal Reserve United States, the ECB’s founding mandate assigns it a task of combating prevailing inflation compared to that of supporting economic growth. The value of inflation considered optimal by the ECB is 2%, objective towards which it aims with its monetary policies. The commentator of the Financial Times Martin Sandbu called for a democratic debate on the role of central banks but also warned against political attacks that risk undermining independence of the monetary authorities.

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About Eric Wilson

The variety offered by video games never ceases to amaze him. He loves OutRun's drifting as well as the contemplative walks of Dear Esther. Immersing himself in other worlds is an incomparable feeling for him: he understood it by playing for the first time in Shenmue.

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