Italian Ministers Step Up ECB Criticism, Warn of Credit Crunch


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Italian Defense Minister Guido Crosetto and Foreign Minister Antonio Tajani stepped up criticism of the European Central Bank’s latest rate increase and President Christine Lagarde’s hawkish rhetoric. 

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“A credit restriction at this time is a very heavy decision,” Crosetto, a close ally of Premier Giorgia Meloni, said in an interview with newspaper La Stampa published on Sunday. 

He also referred to the ECB’s plan for so-called quantitative tightening to shrink its bond portfolio, and the European Banking Authority’s capital recommendations for banks, adding that Italy risks a €100 billion ($106 billion) credit crunch. 

Crosetto was the first Italian official to call Thursday’s ECB’s rate decision an unwelcome “present” for Italy, and was followed by Deputy Premier Matteo Salvini. 

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Read more: Italy Ramps Up ECB Criticism as Spread With Germany Widens 

While Meloni’s right-wing government is preparing a budget law that’s expected to be broadly in line with European Union recommendations, several officials have been targeting the ECB and the Bank of Italy with criticism. Even Meloni said in her first speech in parliament that ECB rate moves were a “rash” decision and damaging to countries like Italy. 

“The decisions from these allegedly technical institutions are taken as if they are UFOs, without taking into account the fallout and without being accountable for these choices that have negative impact on European peoples and nations,” Crosetto told La Stampa.

Read more: Europe Bond Market Gets ‘Wake-Up Call’ From ECB’s Rates Warning

In an interview with Il Sole 24 Ore published on Sunday, Tajani said that while the ECB is independent in its policy decisions, “it’s a mistake to raise borrowing costs for businesses and households in this phase” as inflation is mainly due to high energy costs.  

The yield spread between German and Italian 10-year bonds, regarded as a major risk gauge in the region, widened to 214 basis points last week after the ECB’s decision, the highest since early November.  

—With assistance from Alessandro Speciale and Alessandra Migliaccio.


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