European Parliament warns ECB about inflation

In its resolution, the European Parliament expresses concern that inflation has not been curbed and notes that the credibility of the ECB is at stake, calling for a change in the situation after unsuccessful forecasts in recent years.

The European Parliament has warned the European Central Bank (ECB) that its credibility is at stake in its ability to control inflation.

IN resolution approved by an overwhelming majority of votes to the ECB’s annual report presented by Christine Lagarde to the European Parliament, its members expressed concern that consumer prices failed to tame. “If the ECB fails to bring inflation down to its target level of 2% on time, while simultaneously increasing the cost of financing in the eurozone, especially for citizens and businesses, it risks losing its credibility,” the resolution said.

Parliament is ‘deeply concerned’ persistently high inflation ratesin particular core inflation and the detrimental impact on competitiveness, investment, job creation and consumer purchasing power (especially affecting those on fixed or limited incomes),” Lagarde says, calling on “the ECB to take all necessary measures to reduce inflation in line with its mandate.”

The European Parliament also noted that “this situation causes economic uncertainty and increases the cost of living of citizens, and undermines economic stability.” The resolution notes that quantitative inflation targets must be achieved in the medium term.

Members of the European Parliament also called on the ECB toreview and improve its models and their role in policy-making in light of poor performance in recent years” in a report that points to the ECB’s failure to predict significant rise in inflation two years ago.

The ECB will meet on March 7, when interest rates are expected to remain unchanged but cut for the first time in June, although some board members are pushing for a cut in April.

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