Brussels, 10/12/2007
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.”