Monetary tightening could impair the EU crisis response

The European Central Bank's decision to raise interest rates to combat inflation may inadvertently obstruct the clean energy transition by increasing the cost of capital. The author proposes a green lending facility, specifically targeting building renovation, to shield essential climate investments from tightening financing conditions.

• On October 27, 2022, the European Central Bank (ECB) raised key interest rates by 75 basis points to address EU inflation, which had reached 9.9% in September, and began adjusting the long term refinancing operations (TLTRO III) to shrink its balance sheet.
• The ECB's monetary tightening increases the cost of capital and tightens financing conditions, which makes the deployment of energy efficiency and renewable energy more difficult for households and businesses.
• To prevent monetary policy from impairing the energy transition, the ECB should implement a green lending facility that offers lower rates for clean energy projects, with a particular focus on building renovation.

APA

Martin, L. (2022). Monetary tightening could impair the EU crisis response. Reclaim Finance. https://reclaimfinance.org/site/en/2022/10/28/monetary-tightening-could-impair-the-eu-crisis-response/

Chicago

Martin, Léo. Monetary tightening could impair the EU crisis response. Reclaim Finance, 2022. https://reclaimfinance.org/site/en/2022/10/28/monetary-tightening-could-impair-the-eu-crisis-response/.

Wikipedia

{{cite press release |last1=Martin |first1=Léo |title=Monetary tightening could impair the EU crisis response |publisher=Reclaim Finance |date=28 October 2022 |url=https://reclaimfinance.org/site/en/2022/10/28/monetary-tightening-could-impair-the-eu-crisis-response/ |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@misc{martin2022monetary, author = {Martin, Léo}, title = {{Monetary tightening could impair the EU crisis response}}, publisher = {Reclaim Finance}, year = {2022}, month = oct, url = {https://reclaimfinance.org/site/en/2022/10/28/monetary-tightening-could-impair-the-eu-crisis-response/}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }