The ECB has raised interest rates by 25 basis points on June 15. “Accordingly, the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will be increased to 4.00%, 4.25% and 3.50% respectively, with effect from 21 June 2023,” a European Central Bank press release announced.
Thus, the ECB has implemented the most violent monetary squeeze in its history (400 basis points in 11 months). As a consequence, mortgage loans rates are up 65%, credit to the economy has decreased, government debt is increasing but the ECB is ready to bailout bankrupt banks with extra money.
