MNI BRIEF: ECB Villeroy: Eurozone Inflation Still Too High
BDF head says inflation too high and reform of EU fiscal rules woul help in the monetary/fiscal policy split fight against inflation.
Bank of France Governor Francois Villeroy said Friday inflation in the euro zone remains too high and that the ECB is committed to bringing it back towards its 2% target by 2025.
“These inflation rates remain too high: we must and we will bring inflation back towards our 2% target by 2025. I reiterate this morning this clear commitment which is fully consistent with our latest ECB forecasts. Monetary policy is the first line of defence, and the main remedy for this disease,” he said.
Villeroy said he would not comment on Thursday’s rate hike by the ECB but went in to call for a more “appropriate” fiscal/monetary policy mix to more efficiently tackle inflation. (MNI WATCH: ECB Hikes 25Bp, Signals Peak May Be Near)
He said that the reform of the EU fiscal rules was a major opportunity to realign fiscal and monetary policy mix and so make the fight against high inflation more effective. Central banks and the fiscal authorities should agree on new rules of cohabitation, he said.