ETUC expresses disbelief over ‘hawkish’ messages coming from the European Central Bank
At the meeting of the governing council of the European Central Bank (ECB) last Thursday, council members are reported to have discussed the possibility of raising interest rates. The European Trade Union Confederation (ETUC) finds this attitude unhelpful and calls instead for a cut in interest rates to address the unfolding economic slowdown.
With three month inter-bank interest rates shooting up to 4.86%, the financial crisis is intensifying. Higher finance costs, together with tightening credit standards and an overvalued euro exchange rate, are working to produce a significant slowdown in growth. To avoid a new slump in growth, interest rates should be cut, not raised.
Says ETUC Deputy General Secretary Reiner Hoffmann: “The president of the ECB is calling for an end to all schemes indexing wages to prices. The fact is that such indexation schemes have already disappeared in 99% of the euro area. There is no inflationary danger coming from wages.”
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