Interest rate rise ‘will be only 0.5pc’

18 December 2003

MADRID – A rise in interest rates will be no more than 0.5 percent, predicted Spain’s trade and commerce minister Thursday.

Rodrigo Rato denied reports that there will be a “dramatic” rise in interest rates in the next year.

In an interview with the Onda Cero radio station Thursday, the minister added that a rate rise “may or may not happen” over the next 12 months.

At most, said Rato, the rise would be 0.5 percent, but could be as low as 0.25 percent.

“The situation might happen or might not, but if there is a rise, it will not be dramatic,” he said.

“We are talking about 0.25 percent or, at the most, 0.5 percent, between now and next December.”

Rato said in a free economy the government cannot fix prices by raising interest rates unduly and must bear in mind public opinion.

Reflecting on the recent record rise of the Euro against the dollar and other international currencies, Rato said it could be both positive and negative for business.

“The value of the Euro has risen a lot and this has advantages and inconveniences. We have to have both of them, the advantages and the inconveniences,” he added.

Rato also talked about tax fraud and said it was “more than arguable” to create autonomous tax offices, like the ones planned in Catalonia and Andalusia.

“In order to have a little political power, you don`t have to damage the possibility of having a powerful tax office and that can offer, as the present one does, a very important public service of help for the taxpayer,” he added.

Rato added that if the tax system changes “in order to improve the fight against fraud and to make repayments and service for taxpayer easier, it seems good to me.”

[copyright EFE with Expatica]

Subject: Spanish news