How to reform the European Central Bank
Europe's macro-economic policy framework is in trouble. Eurozone inflation continues to overshoot the ECB's 'reference value' of 2 per cent. Yet businesses and policy-makers are pleading with the ECB for lower interest rates. Eurozone growth has stalled again. And governments in some of the largest member-states are wary of boosting their economies through public spending, since they are already pushing against the fiscal limits of the Stability and Growth Pact, the EU's rulebook for budgetary policy.
Jean-Paul Fitoussi is president of the Observatoire Français des Conjonctures Economiques (OFCE), Jérôme Creel is a researcher at OFCE.
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