In light of the European Central Bank (ECB)’s interest rates hike expected tomorrow in order to fight record high inflation*, the S&Ds recall the need for a gradual and balanced approach. This is key to avoid mistakes of the past. The focus should always be on protecting the most vulnerable Europeans - those hit hardest by skyrocketing energy and food prices.

Biljana Borzan MEP, S&D vice-president for economic matters, said:

“The record high inflation, being pushed by increasing energy prices and commodity shortages, requires determined fiscal and monetary action. Our efforts should be focused on helping Europeans who are struggling to pay their energy and food bills.

“While protecting the most vulnerable members of society from energy poverty, the EU should also continue to push the energy and green transition forward. The recently published ECB climate stress test illustrates the need to accelerate the green transition to preserve financial stability.”  

Jonás Fernández, S&D spokesperson on economic and monetary affairs, said: 

“The path of interest rates increases needs to be gradual. The ECB should find a balance between price developments and slowing growth in the euro area. Otherwise, the economic downturn risks being further accelerated, as it happened back in 2011. We must avoid repeating the mistakes of the past!

“Moreover, the ECB should swiftly put in place an ambitious anti-fragmentation tool to address the surge in bond yields that is already hitting some euro area countries.”

*Note to editors:

The ECB’s Governing Council announced the intention to increase the key interest rates by 25 basis points at its monetary policy meeting on 21 July. Another key interest rates hike is expected in September.