“The European Central Bank cannot act alone”, according to economist Éric Monnet

How to slow down inflation? As expected, the European Central Bank announces a change in monetary policy. Starting this summer, it will stop its net debt purchases, and it will increase its interest rates. Eco guest of franceinfo, Thursday June 9, Eric Monnet, professor at theEschool of economics in Paris, believes that the ECB “can’t do it alone“.

According to him, governments must also take the lead, through budgetary policy, avoiding that “inflation has too strong an impact on the poorest populations“, for example with tariff shields or price controls – “short-term measures“. For the economist, governments must also imagine “substitution measures for certain forms of consumption that would be too affected by energy prices“.

Won’t the rise in interest rates weaken certain countries in the euro zone, such as Greece and Italy? The risk exists, according to the specialist. But Éric Monnet underlines that the ECB, this time, is concerned about it: “The European Central Bank is committed to using all possible new instruments to avoid problems of financial crisis or public debt crisis in the euro area“.

“The ECB says that if the rise in interest rates led to a public debt crisis for certain countries – we are thinking of Italy or Greece – it would intervene again“, he continues: “It is a very strong commitment to unite the euro zone“.

Watch the full interview: