Italy’s Deputy PM Antonio Tajani urged the ECB to cut rates further and consider new QE to help European industry. He also called for easier SME credit and warned the euro’s strength against the dollar is undermining competitiveness.
Quite the dove!
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Italy’s Deputy Prime Minister and Foreign Minister Antonio Tajani said the ECB should take a more active role in supporting European industry, beyond targeted aid. He pointed to the euro’s strength against the dollar as a key drag on competitiveness and argued that with inflation steady at 2%, there’s scope to cut rates further — from 2% to 1.5%, 1%, or even zero.
Tajani also suggested reviving a form of quantitative easing, with the ECB purchasing government bonds as it did during the Covid crisis. In addition, he proposed easing access to credit for small and medium-sized enterprises by temporarily raising the “SME Supporting Factor” threshold from €2.5 million to €5 million via a fast-track procedure.
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The European Central Bank next meet on September 11 and an ‘on hold’ decision is widely expected.
Earlier:
- Reuters cite five sources as saying the ECB may begin cutting rates again later in 2025
- ECB’s Kazaks: Rates in ‘good place’ as officials shift focus to monitoring economy
- Von der Leyen: EU–US trade pact for averting escalation, easing risks for euro, exporters
- ECB’s Lagarde: Eurozone jobs resilient as inflation falls with little cost to employment
- ICYMI – ECB’s Nagel: ‘High bar’ for further rate cuts with eurozone in equilibrium
This article was written by Eamonn Sheridan at investinglive.com.