Three ministers from Italian Prime Minister Giorgia Meloni’s new right-wing government have publicly criticized the European Central Bank (ECB) for raising interest rates despite an impending recession in the Eurozone.
The ECB raised interest rates by half a percentage point on Thursday and, like the US Federal Reserve a day earlier, kept further interest rate hikes firmly on the table to bring runaway inflation under control.
Italy’s Foreign Minister and Deputy Prime Minister Antonio Tajani said on Friday that it was “fair” to criticize such measures because they hurt economic growth and impact markets and budgets.
“I’ve always been very skeptical about the decision to raise interest rates in Europe,” Tajani said in an interview on public radio RAI, arguing that inflation in Europe is largely due to an external factor — the war in Ukraine.
Tajani’s remarks followed similar statements by Defense Minister Guido Crosetto, a close ally of Meloni and co-founder of her Brothers of Italy party, and Infrastructure Minister and Deputy Prime Minister Matteo Salvini.
“I don’t understand the Christmas gift that [ECB] President [Christine] Lagarde has decided to give Italy,” Crosetto wrote on Twitter on Thursday, along with a chart showing an increasing yield differential between Italian and German government bonds.
The BTP-Bund spread closed at 206 basis points on the day, a significant increase from 191 the previous day.
“For everyone who did not understand the impact of the [ECB’s] decisions and communicated in a superficial and distanced manner,” Crosetto said in a second tweet next to a chart showing the fall in the price of Italian government bond futures.
In addition to raising interest rates, the ECB also presented plans on Thursday to withdraw cash from the financial system as part of a stubborn fight against inflation.
This hit the weakest borrowers in the Eurozone, such as the Italian government, which is now reliant on the central bank as its main buyer.
Crosetto went further on Friday, writing on Twitter that raising interest rates “makes no sense,” while increasing capital requirements for banks and tightening government bond purchases were “crazy.”
Salvini, for his part, had described the ECB’s behavior on Thursday as “unbelievable, confusing, worrying.”