Monetary policy in two-speed Europe

Jean-Claude Trichet, president of the European Central Bank, is a man torn by many opposing forces. Having to set interest rates for a monetary union whose constituent economies are running at widely different speeds, Mr Trichet and the governing council will displease everyone no matter what they do. Meanwhile, the nuts-and-bolts part of Europe’s economy, on the whole recuperating, needs different policies than the still convalescent banking system.

Finally, central bankers are not free of peer envy: the ECB’s acumen is regularly compared to the Federal Reserve and the Bank of England.

ESO: Background information: European Systemic Risk Board: EU authority aims to head off crises http://www.europeansources.info/record/european-systemic-risk-board-eu-authority-aims-to-head-off-crises/

ESO: Background information: Cameron warned against two-speed Europe http://www.europeansources.info/record/cameron-warned-against-two-speed-europe/

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