Finance Minister Fernando Medina said today that “the biggest contribution from the state” in view of the rate hike announced by the European Central Bank (ECB) is “a deficit that does not slip” so that it follows developments.
“We will monitor the situation and see how it develops. I have explained many times – since the presentation of the state budget last March and several times during this year – the importance of the Portuguese strategy to reduce public debt. and to have the bills, that is, to have a deficit that does not slip, because that is exactly what allows the country to improve its rating, as has happened in the past,” said Fernando Medina.
Arriving at the informal meeting of eurozone finance ministers in the Czech city of Prague, a day after the ECB announced a 75 basis point rate hike, the finance minister said the government “has prospects to continue on this path.” to go”. .
“It is from the statement of the interest of the Portuguese Republic that then comes the interest that Portuguese banks finance, that Portuguese companies finance, that families finance themselves and that is why it is of the utmost importance and the greatest contribution that the Portuguese State can deliver that it can care about the interest rate situation in our country,” emphasized Fernando Medina.
Asked about possible additional measures to moderate this rise in interest rates, the official pointed out that, “at times when there was a need for such interventions, they did not review the budgetary nature”.
“I remember, for example, that during the pandemic, the whole process of moratoria that existed was an agreement at European level and did not require a budgetary effort, as the magnitude of the problem is not compatible with an isolated action by a country,” be aware.
“Putting the question is not compatible with this isolated action, nor with the isolated action of the public finances of the states”, reinforced Fernando Medina, adding that the European measures taken in relation to the energy crisis also “capture the potential have to control the price rises effectively”.
The ECB announced Thursday that it had decided to raise its three key interest rates by 75 basis points, the second rise in a row this year.
The rate on the main refinancing operations will be increased from 0.50% to 1.25%, the rate for the Marginal Lending Facility from 0.75% to 1.50% and the rate for the Permanent Deposit Facility from 0% to 0.75 %. This increase will take effect from 14 September.
This is the central bank’s largest rate hike and the biggest move of its magnitude, as the central bank reversed its decision in December 2008 to cut rates by 75 basis points.
The institution chaired by Christine Lagarde justified that “this important step anticipates the transition from the highly accommodative level of key interest rates to levels that will ensure a timely return of inflation to the 2% medium-term target set by the ECB. “.
In this way, the central bank indicates that it expects to raise interest rates again in the coming meetings.
Source: DN
