(Finance) – In consideration high inflation, the President of the German Bundesbank, Joachim Nagelthe possibility of increases of ECB interest rates, as he stated in an interview with Spiegel. “At our meeting in June we have to give a clear signal on which direction to take. Then in July we must take a first step and others will follow in the second half of the year “said Nagel, who looks so in line with the President of the ECB, Christine Lagarde.
Nagel, like all euro area central bank governors sits in Governing Council of the ECB. And on the matter he had already intervened a few days ago during the press conference of the German G7 presidency, at the end of the meeting of finance ministers and central bankers in Bonn. “The phase of net purchases of securities of the ECB should end with the month of June “and at that point an interest rate hike could take place in July. And other rate hikes may follow “He said.
When asked by Spiegel if Countries like Italy are prepared for rising interest rates, Nagel replied that “it is true that Italy’s debt-to-GDP ratio rose again during the pandemic. But the risk premiums of Italian government bonds are still not particularly high. Italy, like all villagesi, must obviously convince the markets of the sustainability of public finances “.
Pressed on a new can eurocrisis, replied that “the high debt ratios must be reliably reduced. Credible and binding tax rules can help. One thing is clear: the public finances of Italy, Germany or
any other country they must not be decisive for European monetary policy “ another specific question, Nagel replied that the ECB’s board of directors does not discuss hidden purchases of government bonds, and that “one thing is certain: we must not engage in the monetary financing of states “.
Despite the critical situation, the Bundesbank president has also spoken out cautiously optimistic about Germany: “the German economy is not in such a bad situation. Before the war we expected more than 4% growth. Now this value could be halved. With a growth of around 2%, however, the situation still seems to be in order “.