Italian economy minister says ECB rates hikes worrying for Rome

ROME, Dec 17 (Reuters) – The prospect of subsequent hikes in interest rates by the European Central Bank is worrying for highly indebted countries like Italy, the economy minister said on Saturday, following an ECB decision to raise its benchmark rate by 50 basis points.

“We have benefitted as a country for several years of a favourable situation, with interest rates close to or below zero, and this is now changing,” Economy Minister Giancarlo Giorgetti said at an event in Rome.

He said the rate hikes “should in some way advise us to be even more careful with regard to public finances and assess the consequences for the real economy”.

He also urged the European Union to give a strong and strategic response to the U.S. Inflation Reduction Act (IRA), which he said was posing threats to the national economy.

“Some Italian companies are considering moving production to the U.S. following the IRA scheme, it would be a disaster,” Economy Minister Giancarlo Giorgetti said at an event in Rome.

The EU fears that the $430 billion IRA scheme, with its generous tax breaks for domestic production of energy sector components, may lure away EU businesses and disadvantage European companies, from car manufacturers to makers of green technology.

Photo – Italian Minister of Economic Development Giancarlo Giorgetti . EPA-EFE/ANGELO CARCONI