ETUC warns European Central Bank not to kill the recovery
The European Trade Union Confederation (ETUC) is seriously concerned about yesterday’s decision of the European Central Bank (ECB) to hike interest rates by another 25 basic points.
The recovery is simply not strong enough to face :
the efforts to cut public deficits that are in the pipeline for 2007
continuing excessive wage moderation and complete absence of real pay increases
and, on top of that, a series of interest rate hikes.
If the ECB continues to raise interest rates in coming months, it will serve the upturn a blow from which it might not recover.
‘The ECB doesn’t seem to take notice of the fact that core inflation keeps falling and that the recovery is only in its infancy stage. It is out of touch with economic reality. Workers have moderated wages and contributed to price stability but they are not getting a growth and employment friendly monetary policy in return. This is extremely worrying’, says Reiner Hoffmann, deputy general secretary of the ETUC.
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