In a context of increasing impact of inflation, the European Central Bank (ECB) meets this Thursday to prepare the exit of its controversial policy of negative interest rates.
The ECB Governing Council meeting in Amsterdam, the Netherlands, is expected to mark a historic turning point after years of cheap and plentiful money.
Although they are a minority in the decision-making bodies of the ECB, the “hawks” (supporters of credit tightening) managed to impose their opinion of acting firmly against inflation.
The moment is important, since the increase in prices, aggravated by the war in Ukraine and eroding purchasing power, is compounded by the slow growth of the economies of France and Germany.
Not raising rates would run the risk of fueling the inflationary trend, especially through wage increases.
But raising them too quickly can precipitate a recession by weighing down the borrowing capacity of households and businesses.
Although the shock of inflation is not of the same intensity in all the countries of the euro zone, the governors of the central banks are all in favor of increasing them.
Now it seems impossible to sit idly by in the face of inflation, which in May reached 8.1% year-on-year in the euro zone, four times higher than the ECB’s 2% target. Interest rates have not increased since 2011.
Other central banks facing high inflation, such as the US Federal Reserve and the Bank of England, have already entered a cycle of rate hikes.