Leo Varadkar under fire for ECB interest rates remarks

The Tánaiste called on the ECB to increase interest rates to tackle inflation, prompting criticism from Sinn Féin's Pearse Doherty, who says such a move would be reckless 

Sinn Fein spokesperson on finance Pearse Doherty said the Tánaiste's call to increase interest rates to tackle inflation would mean further price hikes. Picture:Gareth Chaney/Collins

The Tánaiste has been criticised for calling for a review of "monetary policy" to tackle inflation.

Leo Varadkar made the comments on Thursday night, with Sinn Féin alleging Mr Varadkar was advocating for a change in interest rates from the European Central Bank.

The president of the ECB said on Friday that hiking interest rates now would damage the economy and jeopardise jobs without tackling the cause of rising prices.

Sinn Féin finance spokesperson Pearse Doherty said the government had "failed" to tackle the cost of living with its funding package and the Tánaiste's call would mean further price hikes.

"If the ECB, which is independent, followed what the Tánaiste has called for, that means increasing the rates of repayments for households, right across the state, with variable, and tracker mortgages, hundreds of thousands of households would face hundreds of euro additional payments in their mortgage rate," Mr Doherty said.

"A new borrower would face an increase, for example of €2,500 if interest rates were to increase by just 1%.

"What the Tánaiste has called for is reckless. It's damaging, it would not only keep additional pressure on ordinary workers and families, but it is also damaging to jobs and would jeopardise those jobs."

We heard similar comments from the chief economist of the ECB yesterday and again from our own Central Bank. 

"So the Tánaiste needs to withdraw those comments. He needs to explain why he is challenging the ECB to increase them and put more financial pressure on hundreds of thousands of households," Mr Doherty said.

The Donegal TD added that the ministers of finance and public expenditure should state whether they agree with Mr Varadkar.

Mr Doherty also slammed the government's cost of living funding package, saying those who do not need it will receive €200. 

Minister Michael McGrath said this morning he would donate his credit to Saint Vincent De Paul.

"First of all, we would ensure that €200 would not be paid to people who didn't need it," Mr Doherty said.

"This is the minister trying to skirt around and try to find a way of explaining why people who are getting this credit shouldn't be given this credit.

"Over 60,000 people with holiday homes are gonna get a €200 credit.

"The minister knows what their plan is wrong, and therefore it should have been targeted and it should have been a lot more expansive.

"This legislation hasn't passed at all yet. It's still a battle to take place."