Release from the PCP Press Office

Interest rate hike announced by ECB harms the people and the country

The ECB's announcement of an increase in reference rates by 50 points represents a political choice centered on the interests of large economic groups and which rejects the fundamental choices to address the rising cost of living, the devaluation of wages and the boosting of economic activity.

Inflation - which now proves to be far from temporary - must be tackled through measures to increase wages and labour rights, price control and public intervention in the markets of essential goods and services. However, the options of the EU and the ECB are to continue to favour the accumulation of profits, either by increasing the exploitation of workers or by price speculation or even resorting to a measure of raising the cost of capital, as is now the case with the decision to raise the interest rates.

The PCP reaffirms that the brutal price increase is inseparable from the policy of sanctions, which has been determined having in mind the interests of the US - the main beneficiary of the current escalation of confrontation unlike the EU - as well as the process of recovery of economic activity after the epidemic, whose framework has been marked by the use that big capital has made and is making of this process.

The PCP warns that rising interest rates will lead to depreciation of wages, the increase of many bank installments and will make access to credit even more difficult, weakening even more thousands of families and small and medium-sized enterprises. In addition, the impacts on foreign debt, as it is worth remembering that there is a stock of Portuguese debt (public and private) of more than 750 billion euros and which the increase in interest rates will influence. This increase will have a particular impact on families and housing loans, as well as on SMEs, due to the credit dependence of these sectors. 

At the same time, this ECB option will represent an even greater imbalance between public and private funding conditions, harming peripheral economies in the Eurozone like Portugal and benefiting the economies of great powers like Germany.

This ECB decision, built to maintain the profits of big capital and benefit the EU's great powers, once again confirms Portugal's need to regain its monetary sovereignty so as not to be dependent on third-party decisions that harm it.

The PCP reaffirms that what the current situation calls for is State intervention in the pricing policy and in the supply of essential goods and services, as well as the general increase in wages and pensions and bet on national production.

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