Tuesday, August 16, 2022

Be careful with the dosage of the medicine. Inaki Ortega’s opinion

All Spaniards know that the economy is not doing well. They are still unable to correctly read the indicator that measures the rate of inflation or economic growth, but whether it is black is an open secret. Another very different thing is that knowing that the crisis is near, we pretend that nothing is happening. It is difficult to explain otherwise whether the tourism and hotel industries are breaking records or that, according to surveys, the Pedro Sánchez government’s populist measures against banking and energy have been received with fuss. The psychology of economic behavior has called this the ‘titanic effect’. We believe that everything will always work out, but sometimes, as is the case with the famous cruise, this does not happen. The ship sank and some of the passengers, instead of defending themselves, opted to pretend nothing was happening and continued to raise their glass to toast the orchestra.

I don’t want to make the heat bitter for anyone, but last week the European Central Bank (ECB) announced the biggest interest rate hike in 22 years, a pretty clear sign that something very big is happening on our continent. Used to be. An increase of fifty basic points in the value of money is a very high dose of the medicine with which we seek to cure the disease of inflation which has attacked us with great force. monetary officer rates go up so we don’t spend, They raise rates so that we don’t ask for loans. Rates go up so that companies don’t invest. The rate hike is, in short, to cool the economy and at the same time to contain the price rise which has been in a double-digit environment throughout the year.

This is a very high dose of the drug you want to fix inflation with

But the ECB’s decision will create a desire not only to withdraw, but also to increase the mortgage of the Spaniards, that many companies do not have credit refinancing and will have to close. Also, our government, which has been riding Titanic for four years, with a runaway debt that didn’t care because interest rates were laughable, will see how the tables turn. Now it won’t be that cheap the finances we owe as a state And we have to pay more and more to cover our deficit. In other words, public spending cannot be devoted to hospitals, roads or education, but to pay interest, to compensate those who have financed these years, in which the government has appointed economic authorities. We have spent beyond our means ignoring it. We.

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This coincides with the monetary policy decision made in Frankfurt last Thursday. 0.5 high dose of anti-inflation drug hope it doesn’t cause diarrhea But fix us. Just in case, we have to focus on the possibility and practice a normal life without any excesses.

Nation World News Desk
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