What is the value of the Euro? That is the question facing the European Central Bank (ECB) in Frankfurt. Today, the ECB faces a complex inflation exercise and involves a lot of economic push and pull.
Because, there will be a new interest rate decision, which is a compound word for the many measures that will be announced, as inflation rises and the ECB rises above its target of 2%. Meanwhile, economic growth is slowing, hampered by material shortages, logistical disruptions and a growing epidemic.
In recent years, the ECB has made every effort to grow the economy and bring inflation to a healthy 2 percent. The central bank has invested nearly 47 4700 billion in borrowing in the eurozone economy and set interest rates at zero.
The central banks of Europe, the United States and the United Kingdom are struggling with the same question: What to do if drunken inflation occurs?
Pay more for it
The US Federal Reserve decided yesterday to expedite the phasing out of emergency support as expected, ending in March. One year later, the interest rate will be raised in three steps by 2022. In the United States, inflation rose to 6.8 percent and producer prices to 9.6 percent.
Inflation means rising prices for groceries, washing machines, hairdressers and holidays, and gas and electricity bills; Pay more for the same service or product.
Inflation peaks in Euro countries, averaging 5 percent in November, the highest level in 25 years. There are significant differences within the eurozone, for example, inflation is lower in Italy and Portugal, but higher in Belgium and Germany.
Great support project
Over the years, the euro countries have experienced low inflation. It has averaged 1.3 percent over the past ten years. As the economy struggled with the financial crisis and things moved back, the ECB set out a major support program in 2015 to buy government and corporate debt. It came to the point of operating the cut-off point: In total, the ECB allowed the euro economies to operate at 3125 billion euros.
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