Governments must help struggling energy suppliers, the president of the European Central Bank (ECB) said Friday. Corresponding steps have already been taken by Finland and Sweden, explains Christine Lagarde.
The European Central Bank (ECB) and the national central banks of the euro countries are of course willing to provide liquidity – but “for banks and not for energy suppliers”. It is not the central banks that are responsible for the latter, but the governments. “In this current highly volatile environment, it is important that fiscal measures are taken to provide liquidity to market participants in the energy market, especially utilities,” said Christine Lagarde in Prague.
Recently, it has been considered that central banks could also take on a role in supporting utilities that are running into bottlenecks. That is what the European Federation of Energy Traders (EFET), a trade association of energy companies, wanted. In Germany it was announced on Friday that the East German gas group VNG needed help from the state because of the sky-high gas prices.
Fighting inflation is a priority
Shortly before that, the head of De Nederlandsche Bank, Klaas Knot, said that fighting inflation is currently a priority for the ECB over economic growth. “We expect inflation to continue to rise in the coming months,” he told Dutch radio station BNR. This means that the ECB will have to slow down economic growth somewhat in order to reduce inflation.
The ECB would still be “quite far” from the so-called neutral interest rate. Economists understand this as interest rates, which do not slow or warm an economy. Inflation in the eurozone climbed to a new all-time high of 9.1 percent in August.
Source: Krone
I’m Wayne Wickman, a professional journalist and author for Today Times Live. My specialty is covering global news and current events, offering readers a unique perspective on the world’s most pressing issues. I’m passionate about storytelling and helping people stay informed on the goings-on of our planet.
