The transfer of Ferrovial’s fiscal headquarters to the Netherlands has also been addressed by the president of the European Central Bank (ECB), Christine Lagarde, who has attributed it to the fragmentation of capital markets in Europe. However, he has avoided commenting on this movement of the construction group, of which he has assured that he does not know the details: “I do not want to comment on this specific case because I do not know it, but this story convinced me, even more, that we have to fight for a union of the capital market”, he specified in an interview with ‘Espejo Público’ on Antena 3.
He has simply limited himself to saying that large companies seek access to financing and has lamented the obstacles involved in going public in another country, which are influenced by aspects such as language, regulation or taxes. Lagarde has valued the effort that is being made because the capital market union is a reality, but its speed is not as fast as she would like.
Charge against VAT reduction
On the other hand, Lagarde has taken advantage of her visit to Spain to charge against some of the Government’s measures to deal with the rise in the CPI, including the reduction in VAT on basic foods, in force since January 1, for its inflationary effects. Specifically, the organization’s leader has asserted that it is not an “ideal tool”, even if it is the “easiest” to lower prices.
The first reason he has put forward is that it benefits the entire population. The second is because once the previously applied tax rates are restored they will cause a new rise in prices. Faced with this situation, Lagarde is committed to direct transfers, such as the 200-euro check, help that in Spain can be requested by those with an income of less than 27,000 euros per year and assets that do not exceed 75,000 euros.
In this regard, Lagarde has reiterated that inflation in the euro area is high and that the only tool to damage the front is the rise in interest rates. Thus, he has confirmed that an interest rate hike of 50 basis points, up to 3.5%, will be approved at the March meeting of the ECB, as planned. Although he has avoided anticipating future moves in this regard, he has made it clear that the reference rate of money prices will not return to negative territory.
After inflation has dropped in the eurozone by one tenth, to 8.5%, Lagarde has already advanced that she expects prices to begin to fall this March. However, as contemplated by the forecasts made from Frankfurt, it will not be until 2025 when the CPI growth moderates to the target of 2%, a rate that is considered “decent”. In this regard, he has hinted that rate cuts will not occur until they reach that target. “The shopping basket will fall in the coming months, but inflation has to do it first,” he added.
One of the points on which he has focused has been the second round effects that salary increases can cause, before which he has asked not to enter a “vicious circle”. On the proposal to cap the price of mortgages, he has been somewhat more cautious and has assured that it is a matter that is the responsibility of the banks and governments of each country. “It is not within our competence,” she has wielded. On the other hand, he has been more blunt about the resistance of entities to remunerate deposits after the awakening of rates and urges consumers to negotiate with their bank.
Lagarde defends that the ECB does not foresee a recession for this year, although it has suggested that there may be two consecutive quarters of falling activity, which in practice is a technical recession. In this sense, he has called on Spain to monitor issues such as GDP or unemployment, which rose again in February.
Call to fight for gender equality
The iron lady, accustomed to a serious-toned rash, has revealed her more human side. The Frenchwoman could not help but shed a tear when she remembered her childhood and the death of her father when she was 16 years old. During her speech, she was surprised with the appearance on the scene through ‘streaming’ of one of her four brothers who has highlighted her involvement in political affairs since she was young.
Lagarde is characterized by having broken glass ceilings, such as holding the presidency of the International Monetary Fund (IMF). In this sense, she has launched a message about the need for families to share household chores and childcare equally, because it is the only way for women to “prosper” in the workplace.