Commentary: The traffic light must not leave the fight against inflation to the central banks alone

Created: 06/17/2022, 05:42

By: Georg Anastasiadis

In the fight against alarmingly high inflation, the traffic light government must not stand aside.

A commentary by Georg Anastasiadis.

© Frank Rumpenhorst/dpa

The US Federal Reserve is sending the markets plummeting with its monster rate hike.

It's crunching in the eurozone.

The traffic light government is now in demand.

A commentary by Merkur Editor-in-Chief Georg Anastasiadis.

It was great cinema that the US Federal Reserve presented on Wednesday evening at prime time: interest rates up by three quarters of a percentage point, more than they have been in 28 years – the central bankers cannot signal more clearly how seriously they take the fight against the inflation that has skyrocketed to 8.6 percent.

But the Fed's game is dangerous.

It slows down in a weakening economy.

If the economy slides into recession, America's money-keepers will not hesitate, based on all historical experience, to quickly abandon their experiment.

Big interest rate hike by the US Federal Reserve causes turbulence in Europe

The situation in Europe is even more precarious: the announcement of the first interest rate hike led to such turbulence in the euro zone that the ECB had to call an emergency meeting to slow down the rocketing rise in interest rates in highly indebted countries like Italy.

Is the next crisis already knocking at the door?

Exploding energy prices and careless monetary policy - Chancellor must act

In truth, the central banks are shackled: the rate hikes needed to bring inflation to a rapid halt are out of the question because their result would be a severe economic crisis and/or the collapse of the eurozone.

Both would please Putin in particular.

It is more likely that citizens will have to live with higher inflation for longer.

Eight percent monetary loss like this year must nevertheless remain the anti-social exception.

The price-driving dissolution of the corona-related demand backlog, disrupted supply chains and the war-related energy price explosion, together with monetary policy that has been far too careless for far too long, have resulted in a poisonous cocktail that fortunately is not stirred up every year.

However, the state must be careful that its policy – ​​be it through even more climate requirements, building regulations and the shutdown of the last nuclear reactors – does not have an additional price-driving effect and thus put the poorest under pressure.

Chancellor Olaf Scholz must follow up his announcement of a "concerted action" against inflation with action.