The European Central Bank (ECB) today announced a small 0.25 point cut in interest rates.
The European Trade Union Confederation (ETUC) warns this move does not match the scale of the action required to boost investment set out this week in the Draghi report on competitiveness.
The Draghi report warned high interest rates could contribute to public debt becoming “unsustainable” and “negatively affect investments” in the green and digital transitions.
Commenting on the decision, ETUC General Secretary Esther Lynch said:
“While this cut is a step in the right direction, it is insufficient to relieve the financial pressure that record interest rates have piled on working people or unlock desperately needed investment.
“The timidity of the ECB’s strategy is out of step with the urgent need for increased investment set out this week in the Draghi report, which highlighted high interest rates as a barrier.
"“High interest rates have been shown to be ‘costly and ineffective’ in tackling the root cause of this inflation crisis, which the ECB’s own data shows was high profits, particularly in the energy sector.
“The only winners of this strategy have been the shareholders of major banks, which received a massive increase in dividends thanks to higher interest rates.
“The ECB needs to stop exacerbating the cost-of-living crisis and putting quality jobs at risk by fulfilling its responsibility to support the EU’s investment push through much lower interest rates.”
