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17 Dec, 2022 06:35

Debt-laden Italy slams ‘crazy’ ECB rate hike

Three senior ministers make unusually negative comments about the Eurozone financial regulator’s policy
Debt-laden Italy slams ‘crazy’ ECB rate hike

Italian ministers publicly lashed out at the European Central Bank on Friday for a yet another interest rate hike, branding the decision “baffling” and “crazy.”

The comments from three senior ministers from the recently appointed Italian government come after the ECB raised its benchmark rate by half a percentage point on Thursday. It’s feared the move, aimed at taming inflation, will pile financial pressure on one of the Eurozone's most indebted countries.

Shortly after the announcement, Italy’s Defense Minister Guido Crosetto wrote on Twitter that raising interest rates “makes no sense,” sarcastically thanking ECB President Christine Lagarde for the “Christmas present.” Crosetto posted a chart illustrating the widening spread between German and Italian borrowing costs alongside his comments.

He also slammed the regulator’s plan to reduce sovereign bond purchases, calling the move “crazy”, and saying ECB decisions are “taken and communicated with superficiality and detachment.”

By lifting rates, the monetary regulator will harm economic growth, impacting markets and households, Italy’s Foreign Minister and Deputy Prime Minister Antonio Tajani said on Friday, adding that it was “fair” to criticize such moves. He claimed inflation in the EU largely stems from “external” factors such as the conflict in Ukraine.

Echoing remarks from his colleagues, Deputy Prime Minister Matteo Salvini labeled the ECB's decision-making as “unbelievable, baffling” and “worrying”.

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