“Mr. Trichet argues that budget discipline would help growth in Europe more than renewed stimulus, and called on the euro zone’s 17 member countries to strengthen “surveillance” of each other’s fiscal policies. In Europe, budget discipline benefits growth and job creation by “improving confidence of households, enterprises, investors and savers,” said the 68-year-old Frenchman.
In contrast, the U.S. is extending fiscal stimulus this year as Federal Reserve Chairman Ben Bernanke tries to boost growth through a government bond-buying program.
Mr. Trichet’s inflation warnings signal a symbolic shift from the crisis mentality that has dominated ECB policy for much of the past three years back to its traditional role—keeping prices stable. It also helps shore up his anti-inflation credibility in Germany, where officials and the public have been skeptical of the ECB’s decision last May to buy government bonds of Greece, Ireland and Portugal.” Read more.
“Global Price Fears Mount”
Brian Blackstone and Marcus Walker
Wall Street Journal, January 24, 2011.
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