Inflationary pressures in the euro area should be observed carefully. It is the warning that the European Central Bank President Jean-Claude Launches Trichet in an interview with the Wall Street Journal in which it urges the central bankers around the world to ensure that current increases in energy prices and food does not take root in the global economy. In this context, it insures, the austerity of public budgets and the supervision of prices are the best encouragement for economic recovery.
"All central banks in times like this where there are threats from commodity inflation - Trichet said - must pay particular attention that there are no carry-over effects on domestic prices."
The sixty-eight French central banker, whose term of eight years at the helm of the central bank European Union expires in October, argued that fiscal discipline would help growth in Europe over renewed stimulus measures and reiterated the invitation to the 17-member euro zone to increase the 'surveillance' on mutual tax policies.
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