- Eurozone growth rates will be very weak this year
- The war could bring them into negative territory
- ECB action to lower inflation could bring economy down
- Domestic demand would have to be suppressed massively to bring inflation down
- It should be the governments that should help alleviate the crisis by providing subsidies, reducing taxes
We are starting to see some finger pointing as Panetta directs lawmakers to take action to try to combat the negative impact of rising inflationary pressures. As mentioned earlier, central banks don’t have the right tools to deal with this and even with ECB action, it won’t really solve the inflation puzzle.