The war in Ukraine reminds us of what a frightening drama that of war conflicts is.
But perhaps even more hateful than war is the thought that someone can earn and get rich on the suffering and death of so many people. It is a thought that actually frightens and leaves you breathless. Yet many today are in the dock as far as war profits are concerned.
There is a strong suspicion that large international oil and energy merchants are speculating on price rises. This voice has been raised from many quarters and when recently some companies claimed to want to violate the embargo against Russia for having lower cost raw materials, it was harshly criticized. Inevitably, the arms industry is also on the dock. Think military jets that cost billions of dollars are used to bomb poor wretches who earn, hopefully a few euros a day, is something that hits the sensitivity of any human being at a very deep level. But in Italy for ordinary people the anxiety is that of mortgages and loans. The inflation scenario of war is scary for many reasons.
For citizens, the problems are many
Because it makes the purchasing power of Italians really low and because it erodes savings, but that’s not all. Many families are in real risk of ending up below the poverty line, but those who have mortgages are particularly apprehensive. So let’s try to understand what is happening. The subjects most at risk are for obvious reasons those who have variable rate mortgages. In fact, the variable rate mortgage could easily spike due to inflation and war.
The mortgage issue
In fact, these mortgages are affected, albeit indirectly, by the rate applied by the European Central Bank. Therefore, those who have an active variable rate mortgage are today burdened by the fear that this could rise. Up to now this has not happened because the European Central Bank has kept interest rates at zero despite very strong inflation. But experts advise to quickly provide for a subrogation.
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In fact, switching to a fixed-rate mortgage will probably be a little more inconvenient in the immediate future, but it will protect you from price increases. Yet the increases on the variable rate mortgage are by no means discounted. In fact, the European Central Bank has proved very determined to avoid raising rates. But with such a situation and with real inflation that can now be close to 10%, there are no guarantees.
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