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Italian Finance Minister Giancarlo Giorgetti said monetary-policy measures alone can’t tame inflation.
“Fighting inflation with monetary policy is not enough, and recession can’t be the price to pay for fighting inflation,” Giorgetti said Saturday at the Ambrosetti workshop in Cernobbio, Italy.
Faced with the biggest cost-of-living crisis in a generation in the wake of Russia’s invasion of Ukraine, governments across Europe introduced a raft of measures to shield households and companies.
Italy has spent more than €90 billion, though — faced with regular calls from the European Central Bank and European Commission that aid needs to be temporary, targeted and timely — it has now started to scale back its support.
At the same time, the ECB is in the midst of its fastest tightening cycle ever, raising interest rates by 350 basis points since July to tame price pressures. That aggressive action has prompted some in Italy to criticize the central bank.
Giorgetti on Saturday took a more nuanced approach and also touched on recent turmoil in financial markets linked to the collapse of SVB in the US and a government-brokered takeover of Credit Suisse Group AG by UBS Group AG in Switzerland.
“Central banks’ autonomy must be respected, but I believe that monetary policy should be aimed both at containing inflation and maintaining financial stability,” he said.
- The government’s 2023 GDP forecast for Italy of 0.6% will be revised slightly up, he said, reiterating earlier comments
- Keeping Italy’s public accounts in order remains an “absolute priority”
- Italy’s banking sector remains solid
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