The ECB’s decision this Thursday, June 11, to raise interest rates by 25 basis points – bringing the rate to 2.25% from June 17 – repeats the option to protect bank profits whilst punishing the workers, populations and economic activity as a whole.
Given the nature of this inflationary process – centred on the escalation of the policy of war and aggression promoted by the US and Israel, with the strong support of the European Union – the option to combat inflation through interest rates results in a double penalisation for workers, their families and also micro, small and medium-sized enterprises. For workers and micro, small and medium-sized enterprises, capital costs increase, often to prohibitive levels, whilst the causes of inflation persist and worsen with the total complacency and complicity of the European institutions.
These measures have already shown their negative impacts in the recent past, exposing hundreds of thousands of Portuguese people to a brutal increase in their mortgage payments (and also consumer loans), given the predominance of variable-rate housing credit in Portugal.
What is required is not alignment and enthusiastic subservience – as revealed by the current Governor of the Bank of Portugal – to these ECB guidelines, but rather a fight from the Government against options that promote a policy of confrontation and war (with the EU's subservience to US imperialism) and prioritize the (ever-increasing) profits of the banking sector at the expense of the stability and well-being of millions of workers.
What is required is a concerted policy of price regulation (energy, food, interest rates, fees and bank commissions), along with a general increase in wages to address the rising cost of living and combat injustices and inequalities. What is required are measures to support national production and public investment geared towards the Country's development needs, instead of options that, in addition to promoting the impoverishment of the population, jeopardise the necessary economic growth (which is clearly slowing down) and development of the Country.
