Criticism of European Central Bank monetary tightening is persisting, with a new round of attacks on Thursday from southern Europe’s senior politicians.
Frankfurt officials haven’t properly understood the nature of inflation that the euro area is currently facing, Portuguese Prime Minister Antonio Costa told reporters in Brussels, while Italian deputy premier Antonio Tajani added criticism after an initial salvo earlier in the week.
“We hope that, from September, we may start to resume a monetary policy trajectory that is more adequate for what is fundamental,” Portugal’s premier said, observing a need to “safeguard the living conditions of families, the capacity of companies to invest and of the economy to continue growing and generating jobs that generate better salaries.”
The remarks add to a flurry by senior government figures in recent days, suggesting that an effective hiatus in commentary on the politically independent ECB has ended with an open season to speak out. That may be one measure of evidence that 400 basis points in interest-rate hikes are starting to impact the euro-zone economy.
“We have great respect for the ECB and we reaffirm its independence, but it is also legitimate to make observations,” Tajani said in Brussels, in comments reported by Ansa. “I have criticized — and not from today — some choices made in the fight against inflation, which derives from the cost of raw materials, whereas in the US it comes from a very favorable economic situation.”
Tajani, who is Italy’s foreign minister and one of the party leaders in premier Giorgia Meloni’s coalition, also sought to qualify his remarks, as did Costa.
“We believe in the ECB and the European Commission,” the Italian said, while maintaining “the right to participate in the debate.” The Portuguese premier meanwhile affirmed that the ECB “is sovereign in defining monetary policy.”
A day earlier Costa’s finance minister, Fernando Medina, said that he has personally voiced concerns to ECB President Christine Lagarde about the impact of higher borrowing costs. In Italy, both Meloni and deputy premier Matteo Salvini, another coalition leader, have slammed the central bank’s policies in recent days.
Spanish Economy Minister Nadia Calvino kicked off the latest round of commentary, albeit in measured tones. The country may not require more rate hikes, she said last week, while adding that “I know the ECB is looking at Europe as a whole.”
Costa offered an extensive critique in his comments on Thursday at a time when policymakers are preparing to raise rates in July, with the possibility of more action thereafter.
“I think there hasn’t been sufficient understanding on part of the ECB about the specific nature of the inflationary cycle we have been having, and also not taking into due account what are the factors that have fed this inflationary tension,” he said. “If we don’t get the diagnosis right, then the therapy rarely hits the target.”