ECB inflation target unsuccessful

The European Central Bank (ECB) President Jean-Claude Trichet said that the economic shocks from the credit crisis and inflation pressures are still to be fully felt, which is part of the reason why the ECB is not reaching their inflationary targets.

However Trichet also cast light onto the fact that fault may also lie with the inflationary targets themselves.

A chief analyst has described the ECB as keeping up a fiction as the trade-off between growth and inflation has really changed so the target should always be adjusting accordingly to make the target achievable and relevant.

Thus far, the ECB has failed in the last eight years to achieve its aim of bringing inflation below 2 percent and that target has been made even more unmanageable as a result of the adoption of the euro by fast-growing eastern European countries and the affect of the emerging markets in Asia.

Trichet has remained defiant in that, despite current inflation pressures, the ECB will maintain price stability in the long term, even though the recent track records indicates otherwise.

As the 10 year anniversary of the ECB approaches, Trichet has described the monetary union as an undeniable success as a result of the credibility of the currency.

However, he did admit that the euro zone still needs to implement more economic reforms to increase economic growth and structural reforms are still needed.

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