Saturday, August 13, 2011

Does the Eurozone need a new central bank (part 2)?

Further to Part 1 (July 7, 2011), while the Fed this week pledged to keep interest rates near zero for another 2 yrs, the ECB's President has boasted for having kept Euro inflation lower than Germany did during the DM days (1)!!! Does it take an economist or MBA to figure out that there is something wrong with that? The effects on the price of the Euro and thus on Eurozone's firms, over-priced for a large part of 2002 - present, not only in foreign markets compared to US, Chinese or even non-Eurozone EU made products (and services, see eg tourism) but also in the Eurozone and even home markets!

Europe, wake up! Anti-inflation fixation is suffocating the real Eurozone economy!

(1) New York Times, August 5, 2011: Euro Builder Ends His Career on a Bitter Note: "... As he never tires of reminding journalists, since the introduction of the euro in 1999, the central bank has held inflation below the official target of about 2 percent — a better record than the Bundesbank in the heyday of the German mark...."

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Nick

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