First ECB interest rate cut expected for early June 2024
First ECB interest rate cut expected for early June 2024

30 April 2024 – The ECB is expected to cut interest rates for the first time at the beginning of June 2024 despite a slight increase in inflation data. Chinese property stocks provide positive impetus. And the EPP Christian Democrats show once again what European SMEs can expect from them in the future with a question to the European Commission on market protection measures for stainless steel: Nothing.

First ECB interest rate cut expected for early June 2024

Despite a slight rise in inflation in the eurozone, analysts at Deutsche Bank expect the European Central Bank (ECB) to cut interest rates for the first time on 6 June 2024. This expectation is also reflected in a slowdown in lending to private households in the eurozone.

Consumers are waiting in the wings

Consumption is currently only being shifted in the short term and lower ECB interest rates are being waited for in order to be able to take out more favourable loans. Falling ECB interest rates therefore logically lead not only to increased demand for credit, but also to rising demand for consumer and capital goods. It is therefore good to be able to deliver at this point in time in order to take advantage of this effect.

Positive impulses from China too

Positive impulses can also be expected from the race to catch up in Chinese property shares, which have risen by 15% since mid-April. The property market accounts for more than a quarter of China’s economic output. Developments on China’s property market are therefore likely to have a noticeable impact on the market as a whole.

EPP now just a lobby party for major European corporations?

In March, the EPP once again showed how far removed it is from European SMEs, or how interested it is in them at all, with a question from a Belgian Member of the European Parliament (MEP) to the EU Commission regarding the ongoing anti-circumvention proceedings against stainless steel from Indonesia.

In his question on 21 March 2024, Tom Vandenkendelaere from the Group of the European People’s Party referred solely to the oligopolistic corporate structures of European stainless steel mills, which he considered worthy of protection. He also made unsubstantiated claims that EU stainless steel mills were exposed to unfair competition and market distortions.

SMEs deliberately discriminated by the Commission and EPP

In his question to the EU Commission, Mr Vandenkendelaere completely ignored the European SME sector, which is reliant on imports. And the response from Executive Vice-President Dombrovskis on behalf of the European Commission on 29 April showed once again that SMEs could expect nothing from the Commission and the EPP in a possible second term of office under the distant and over-bureaucratised leadership of Commission President Ursula von der Leyen: Nothing.

Liberal alternatives urgently needed

The behaviour of the EPP (which includes the German CDU and Christian Democratic parties throughout the EU) and the targeted attempt to exert influence on behalf of large EU corporations must be a wake-up call for more liberal economic policy in the EU Parliament and also in the Commission. Because with the EPP, there can and will only be more bureaucracy and systematic discrimination against European SMEs after the European elections.

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