The President of the Republic, Marcelo Rebelo de Sousa, defended this Tuesday that the ECB must seek balance and “think very well” about raising interest rates to avoid economic stagnation.
Speaking to journalists in Napa Valley, California, the head of state developed the message he left on Sunday night about the actions of the European Central Bank (ECB) chaired by Christine Lagarde, considering that it is having “a type of online reaction with the American orientation” to the current situation of rising prices.
The US orientation is very clear, that is to say: even if it costs the economy to grow, we are going to focus on controlling inflation with massive increases in interest rates. Now the United States has a great advantage in this, is that it can produce as many dollars as it wants,” he said.
Marcelo Rebelo de Sousa added that “Americans can afford this kind of reality,” but “other economic spaces,” such as the European Union, “have to think about the consequences of stagnation” when it comes to inflation.
In this context, the head of state appealed to seek “a balance to avoid stagnation with inflation, as happened in the 1970s.”
“It is perceived that the ECB felt the need to respond to the rise in the price level. You have to calibrate the message, as they say. After a period in which the concern was to avoid increases in interest rates, it is necessary to think very carefully about the increase to be introduced, because if this increase is very, very strong, in economies that have not yet started, it can delay the start. ”, she reinforced. .
“There is a balance here,” he insisted.
Regarding the case of Portugal, the President of the Republic reiterated that there are “very good economic growth figures so far in 2022”, but “the awareness that they are not repeatable in 2023”.
“The question is where we will be in 2023. And what no one knows the answer to is where will inflation also be between the end of 2022 and 2023,” he said.
According to Marcelo Rebelo de Sousa, “this balance, which was already the headache of the 1970s, between controlling the level of prices, which affects families and companies, and on the other hand Preventing the economy from suddenly falling a lot and suddenly stopping growing or growing stronger is the great challenge for regulators, for officials, for everyone.”
Source: Observadora
