Gary O'Callaghan: One-for-all plan leaves more than periphery hanging on edge
Published 07/07/2011 | 05:00
There might be a need for tighter policies in some regions at any one time but policy must be designed for the zone as a whole
The ECB will probably raise interest rates at today's meeting. Its explanations will reinforce the sense that the central bank is dangerously complacent in the face of a crisis that it helped to create.
First, the governing council will remind us that its primary objective is to maintain price stability -- defined as average inflation just below 2pc over the medium term. Prices increased by 2.7pc in the year through June and this excess is the immediate reason for the rate hike. Higher interest rates are intended to lower demand and curtail price increases.