On Thursday 26 October, the non-governmental organisation Positive Money Europe welcomed the decision by the Governing Council of the European Central Bank (ECB) not to increase its key rates further, but to maintain them at the levels decided at its monetary policy meeting on 14 September (see EUROPE 13250/1), i.e. 4% for the rate on the deposit facility, 4.5% for the rate on the main refinancing operations and 4.75% for the rate on the marginal lending facility.
However, following the Governing Council meeting on 26 October, ECB President Christine Lagarde stressed that this pause did not mean that the Governing Council would not carry out further hikes in future monetary policy decisions. The decision-making process remains true to the meeting-by-meeting, data-driven approach (see EUROPE 13280/8).
Jordi Schröder Bosch, researcher at Positive Money Europe, believes that the ECB’s decision to take a pause came too late.
In particular, Positive Money Europe believes that the ECB’s restrictive policy favours bank profits, but penalises the green transition. For the NGO, the rise in lending rates offered by banks, which are passing on to households and businesses the higher rates at which they themselves are borrowing, is holding back investment in the green transition, particularly in the energy efficiency and renewable energy sectors, and disproportionately affecting green businesses. This, in the association’s view, runs counter to the ECB’s climate change stress test.
The NGO believes that the ECB should consider not applying a single restrictive monetary policy to all sectors and differentiating its approach for the green sector. (Original version in French by Émilie Vanderhulst)