ROME (Reuters) – The European Central Bank (ECB) must avoid an excessive increase in real interest rates given the level of private and public debt in the euro zone, Governing Council member Ignazio Visco said on Saturday. of the Frankfurt Institution and Governor of the Bank of Italy.
According to him, it is possible to curb inflation without falling into recession while the ECB has raised its interest rates since July by 300 basis points and hinted that an additional hike of 50 points would take place in March.
“Today, disinflation is obviously necessary, but given the prevailing levels of private and public debt in the eurozone, we must be careful not to implement an unnecessary and excessive increase in real interest rates” , he told the Warwick Economics Summit, referring to the cost of credit, excluding inflation.
“Indeed, I am convinced that the credibility of our decisions is preserved not by flexing our muscles in the face of inflation, but by continually demonstrating wisdom and balance,” he added.
(Report Giselda Vagnoni; French version Claude Chendjou)
©2023 Thomson Reuters, all rights reserved. Reuters content is the intellectual property of Thomson Reuters or its third party content providers. Any copying, republication or redistribution of Reuters content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters. Thomson Reuters shall not be liable for any errors or delays in content, or for any actions taken in reliance thereon. “Reuters” and the Reuters Logo are trademarks of Thomson Reuters and its affiliated companies.