Italy’s two deputy prime ministers lashed out at the European Central Bank after its president, Christine Lagarde, signaled an intention to hike interest rates again next month.
(Bloomberg) — Italy’s two deputy prime ministers lashed out at the European Central Bank after its president, Christine Lagarde, signaled an intention to hike interest rates again next month.
Matteo Salvini and Antonio Tajani, leaders of coalition parties in premier Giorgia Meloni’s government, both criticized the prospect of further monetary tightening in the wake of her comments at an annual retreat in the Portuguese hilltop resort of Sintra.
“The European Central Bank, against its own research and common sense, is signaling plans to raise rates further, hurting families and companies,” Salvini said on Tuesday, describing the policy as “nonsense and dangerous” and saying he will seek a meeting with Italian Executive Board member Fabio Panetta.
Meanwhile Tajani, who is also foreign minister, was cited by news services as saying that “with rates that are too high, you risk a recession.”
Those remarks arrived on the eve of data that may show a drastic slowdown in Italy’s inflation, giving a foretaste of other reports from around the region later this week.
With underlying euro-zone price growth on Friday still likely to show an acceleration in June, ECB officials are taking no chances. They’re preparing to hike borrowing costs again in July, and some including Bundesbank President Joachim Nagel have also hinted at the need for another increase at the subsequent meeting in September.
The ECB is a frequent target for Meloni’s right-wing government, whose room for maneuver on economic policy is limited by European Union recommendations to keep its mammoth debt burden in check. Pressure could increase if the economy there loses momentum, a risk outlined by the country’s main business association on Monday.
Other governments are also wary, for example that of Spain, which is in the middle of an election campaign. With inflation there heading below the ECB’s 2% target, Economy Minister Nadia Calvino said last week that the economy “maybe should not require more rate hikes.”
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