ECB should concentrate on controlling inflation

The European Central Bank President Jean- Claude Trichet has said that the banks sole aim is to control inflation by setting interest rates in order to maintain price stability.

Although the French and Italian governments has put their opinions to the fore as they call for the ECB to take growth into account.

Trichet said that the monetary policy stance on the basis of no other considerations than the delivery of price stability, and that the policy should be slanted to accommodate this.

The ECB has held the inflation rate to a six-year high at 4 percent to contain inflation, which grew to 3.6 percent last month.

In the current climate of sharp fluctuations between major currencies, and the global economic problems changes in the euro could have dire implications on both economic and financial stability of the euro zone’s exports.

Both politicians and economists have become concerned that a fall in exports as a result of the euro’s strength will fuel a cycle of further economic slowdown.

French Finance Minister Christine Lagarde said that the strong euro is a difficult for French companies and the ECB would change in policy would be beneficial for growth by closing the gap between the ECB’s benchmark rate and that of the U.S. Federal Reserve.

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