• Euro area growth rates will be very low this year
  • The war could bring them into negative territory
  • ECB action to bring down inflation could crash the economy
  • Would need to massively suppress domestic demand to bring down inflation
  • It should be governments who should help mitigate the crisis by providing subsidies, reducing taxes

We're starting to see some finger-pointing as Panetta points to lawmakers to take action in order to try and combat the negative impact from surging inflation pressures. As mentioned before, central banks don't have the right tools to deal with this and even with ECB action, it isn't really going to solve the inflation conundrum.