Finance Minister Fernando Medina announced this Friday the creation of a mechanism to create stability in the face of rising interest rates after a new increase, and also announced the extension of interest subsidies on housing loans.
“What the government is doing is precisely creating a mechanism to further protect these families in relation to the movement of interest rates, creating a situation of predictability, stability, at the same time we will expand access to credit subsidies, which is the support that we provide to those families who, having reached a certain level of income, experience very significant efforts this Friday,” said Fernando Medina.
Speaking to Portuguese journalists at the entrance to an informal meeting of European finance ministers in the Spanish city of Santiago de Compostela as part of the Spanish Presidency of the Council of the EU, the minister noted that “in fact there are many families who, as a result of this recent increase in burden, housing costs and the impact that has on their budgets have increased significantly.”
“So we have to pay special attention to these families,” he added.
According to the official, the government has “worked very intensively in recent months” to mitigate the impact of successive interest rate increases together with the Bank of Portugal and the Portuguese Banking Association and thus “developed a solution that would be effective.” solid for Portuguese families.”
Specific measures will be approved by the Council of Ministers next week.
“Then all the details will become public knowledge, [mas] We are working to, on the one hand, stabilize payments over a certain period, that is, to give peace of mind to families during a period of rising interest rates, so that we can somehow protect them from uncertainty and risk. the fear of this is consistently increasing,” said Fernando Medina.
Additionally, “the second area is to expand interest subsidy support to those families who currently have an effort level greater than 35%, and especially to those who currently have an effort level greater than 50%,” he said , adding that the executive will “expand access criteria” to “make it easier for families to access this interest-subsidized support.”
The stance comes as the ECB on Thursday announced a fresh 25 basis point hike to its three key interest rates, the same as at its previous meeting, placing the deposit rate at its highest level in euro zone history.
In a statement issued after the meeting of the Governing Council on monetary policy, the ECB said that the interest rate applicable to main refinancing operations, as well as the interest rates applicable to the margin lending facility and the deposit facility, will be increased to 4.50%, 4 .75% and 4.00% respectively, effective September 20, 2023.
It was the 10th straight rate hike by the central bank, which has raised interest rates by 450 basis points since July last year, the fastest growth cycle in euro zone history.
Inflation rates have fallen in recent months from historic highs due to the economic reopening from the Covid-19 pandemic, the energy crisis and the economic fallout from the war in Ukraine, but are still above the 2% target. ECB for price stability.
To achieve this, the ECB tightened monetary policy with successive interest rate hikes, now at a slower pace, leading to lower consumption.
Given this scenario, eurozone finance ministers will today discuss the macroeconomic context in the single currency area and should press for commitments to fiscal prudence.
Author: Lusa
Source: CM Jornal
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