Progressives urge PM to provide clarification on support measures planned in response to ECB's rate hikes

  • 2023-06-27
  • LETA/TBT Staff

RIGA - MP Andris Suvajevs (Progressives) on Tuesday called on Prime Minister Krisjanis Karins (New Unity) to provide clarification as to whether and what  support measures are being planned to offset the impact of rate hikes implemented by the European Central Bank (ECB).

The latest ECB rate hike came into effect on June 21. This was the eighth successive rate increase and took the ECB's key interest rate to 4 percent, the highest in 22 years. 

According to the Progressives, almost 20 percent of Latvia's population are already experiencing the effect of the increased interest rates, as ECB interest rates are linked to mortgage and car leasing rates. Half of mortgage holders have seen their monthly payment increase by more than EUR 80, the party claims. Meanwhile, ECB representatives have warned that even higher rate increases are possible in the future.

"The rate hikes are particularly harsh in the current situation of high general inflation, with price increases seen in virtually all categories of goods and services. The rise in interest rates is therefore seriously undermining people's living standards and purchasing power," Suvajevs said, adding that the middle class has been affected especially severely. 

The lawmaker therefore inquired about the government's plans to introduce support measures to alleviate the impact from the rate hikes on families with children. 

Suvajevs has previously said that the current government coalition has been paying insufficient attention to cost-of-living issues.