MNI BRIEF: Firms, Govs, Unions Must Help Cut Inflation - Nagel

Governments, companies and labour unions must player a greater role in bringing inflation back to the ECB’s 2% in a timely and sustainable manner, Bundesbank president Joachim Nagel said in a speech Monday - remarks that echoed recent analyses by Executive Board members Philip Lane and Isabel Schnabel.

Nagel, who indicated recently that the ECB could continue to raise key interest rates in September, said it will "not be possible to achieve sustainable stable prices in the euro area again without some effort”, but that "if the political and economic environment also lives up to its responsibilities, we will soon leave the phase of high inflation behind us.” (see MNI: Fast Return To 2% Inflation Difficult-Greek Cenbank Deputy).

Public spending should be limited, debts reduced and competition policy used to limit excess market power among firms, he said. Companies should ensure that prices rise only “moderately and justifiably and do not take the opportunity for short-term windfall profits. And collective bargaining parties [should] show the sense of proportion for which they have rightly been praised in the past.”