The president of the European Central Bank (ECB), Christine Lagarde, has criticized the introduction of general VAT cuts, considering that their effects are not specifically limited to the vulnerable and that when they are reversed they have an upward impact on inflation.

In an interview with ‘Espejo P├║blico’, the Frenchwoman recalled that she was Minister of Finance in her country to point out that lowering VAT “is one of the easiest and most convenient tools”, although, in her opinion, the problem is that benefits everyone whether you are rich or poor, when in Europe specific objectives should be established for the most vulnerable.

Likewise, for Lagarde, this type of action entails a second problem, since at some point the VAT cuts have to be reversed because the income from the collection of the tax is necessary, which will cause inflation.

“I understand why it is done, but I think it is not the ideal tool,” said the ECB president, who pointed out, on the contrary, that measures such as the check for people who earn less than a certain income threshold “has a clearer objective.

The French company has also considered that the increases in the SMI and pensions in Spain have clear objectives, while it has defended the need for companies and unions to sit down to negotiate, at a general level in the different countries of the euro zone, since that it is undesirable to enter a wage-price spiral, as this would force the ECB to tighten monetary policy even further.

On the other hand, he recalled that the central bank does not have the capacity to regulate the mortgage market, since this corresponds to the national authorities, for which reason he has recommended that citizens renegotiate the terms of their mortgages with the entities to avoid risks , according to the agency Europa Press.

Likewise, Lagarde has recommended that bank clients address the issue of remuneration for their savings with their entities, which for the moment has not improved in line with the rise in the price of money.

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