Published on :
Efforts to cap energy prices will do nothing. Inflation will remain high for the next two years in Germany. This is the message of two officials in the German press when Europe’s leading economy is facing an inflation rate not seen since the 1950s. What justifies in their eyes the monetary tightening of the European Central Bank which promised to raise interest rates to fight inflation.
Europe’s largest economy will remain mired in record inflation for at least two years. The warning comes from Monika Schnitzer, the head of the German government’s economic advisers, in the newspaper Rheinische Post. At issue, of course, is the insane increase in energy costs due to the war in Ukraine.
Companies will continue to pass this increase on to their customers at least until 2024. What justifies the maintenance of the increase in the key rates of the European Central Bank (ECB), replies in echo Isabel Schnabel, member of the executive board of the ECB, in the german newspaper Frankfurter Allgemeine Zeitung. The one who belongs to the camp of the hawks of the ECB defends a prolonged tightening of the monetary policy of the European banking institution.
Last week, the Frankfurt institution pointed out that the rise in prices at the euro zone level will remain above its 2% target during three years. So don’t expect her to release the brake pedal anytime soon. The decision was shouted down by Italy, but faced with these reactions, the ECB must resist political pressure, warns the member of the ECB’s executive board.
►Also read: Inflation picks up again in Germany after end of support measures