Italy’s Prime Minister Giorgia Meloni on Wednesday openly criticized the European Central Bank policy of consecutive interest rate hikes aimed at fighting high inflation in the eurozone, saying it risks hitting the economy instead of helping it.
In a speech to parliament ahead of the European Summit in Brussels, the Italian premier said that “inflation is an obnoxious hidden tax that must be fought with determination, but the solution is not to raise interest rates.”
Meloni is not the first Italian politician to raise doubts over the recent moves by European Central Bank head Christine Largarde, who earlier this week pre-announced another interest rate hike for July, drawing criticism from Italian deputy premiers Antonio Tajani and Matteo Salvini.
“It is right to fight inflation decisively, but the simplistic recipe of raising rates undertaken by the European Central Bank does not appear in the eyes of many to be the right path,” Meloni said.
She also stressed that rising prices in Europe are not the effect of a growing economy, but are caused by “endogenous factors, first and foremost the energy crisis.”
“The risk that cannot be ignored is that the constant increase in rates may be a cure more harmful than the disease,” Meloni added.
On Tuesday, Tajani, who also serves as Italy’s foreign minister, said high interest rates put the country at risk of recession, attacking the decision by Lagarde to make policy announcements in advance.
The European Central Bank raised its interest rates to their highest level in more than 20 years earlier this month, pushing the benchmark rate in the euro area to 3.5% and announcing another hike for next month.
