2.7 Social and cultural acceptability

A strong currency keeps both inflation and ECB interest hikes at bay.

Yet one can easily see the problems who judges the eligibility of candidates and how are such judgements enforced?

If a reform is as good as we think it is, then so is public debt to finance its political acceptability.

India also advocated seven amendments to the new constitution, to ensure its acceptability to the Madhesis and Janjatis.

The Yes camp argues that rejecting the Constitution would damage the European Central Bank (ECB) and the euro.

The longer energy prices remain at their current lofty levels, the greater the probability that inflationary expectations will increase and that second round effects will materialize.

Further procrastination on interest rate normalization by the ECB could well lead to a nasty bout of inflation.

By embedding US policies in multilateral frameworks, America can make its disproportionate power more legitimate and acceptable.

It remains to be seen how willing the ECB will be to provide national central banks with the volume of euros needed to play this role fully.

A Yes vote, on the other hand, would encourage a reassured Chirac to continue his policy of no reform and scapegoating the ECB.

External political pressure on the ECB and its president, Jean Claude Trichet, to lower interest rates and talk the euro down surely would increase.

It concerns whether the big countries are willing to sacrifice any measure of national sovereignty for the European good, said one influential ECB official.

Further procrastination on interest rate normalization by the ECB could well lead to a nasty bout of inflation. This would be disastrous for Europe s economic recovery, as the ECB would have no choice but to slam down hard on the monetary brakes.

For the ECB, an increase of 50 basis points could do the job at this point after which rates could probably be put on hold for some time.

This would be disastrous for Europe s economic recovery, as the ECB would have no choice but to slam down hard on the monetary brakes.

Mr. Greenspan s statement in Frankfurt in November alarmed senior European Central Bank (ECB) officials, who considered it a provocation one that promptly sent the dollar into an unwanted tailspin.

The tone of ECB President Jean Claude Trichet s comments in the Q A section of the press conference following the October meeting was unusually hawkish.

By constantly pushing for lower interest rates than the ECB can deliver, politicians set the central bank up as a scapegoat for Europe s poor economic performance.

The ECB must not make the same mistake, even bearing in mind that the two central banks operate in different milieus and under different constraints.

Judging from the outcome of last month s meeting of the ECB s Governing Council, that ounce of prevention appears to be right around the corner for the euro zone economy.

Europe began its own American style debate on the origins of life when Cardinal Christoph Schönborn of Vienna cast doubt on the acceptability of Darwinism and evolutionary theory to people who see themselves as faithful Roman Catholics.

Perhaps we will eventually see the emergence of a rival Fed Subway blog, though I am not optimistic about the prospects for an ECB U Bahn blog anytime soon.

For the first time, the ECB president was willing to admit publicly that the Governing Council had discussed the pros and cons of a rate hike at the meeting.

Nonetheless, current interest rates were described as still appropriate in October, signaling that the ECB has not yet reached a decision to bite the bullet. To be sure, an unexpected slowdown in economic activity or a strong rise in the value of the euro could postpone the inevitable rate hike.

Nonetheless, current interest rates were described as still appropriate in October, signaling that the ECB has not yet reached a decision to bite the bullet.

September headline inflation, at 2.6 , is above the ECB s 2 target as is the latest forecast for 2006 inflation (updated forecasts will be released at the beginning of December).

At the same time, the ECB does not need to go nearly as far as the Fed, which has raised interest rates in increments of 25 basis points at 12 consecutive meetings, with still more to come.

The period of wage moderation may be coming to an end, warns Otmar Issing, the ECB s chief economist, implying that soaring energy prices may now be feeding through into the overall price level (so called second round effects ).

But what seems clear is that the ECB used the October press conference to warn politicians, trade unions, and the markets that its long period of monetary policy inactivity is coming to an end.

At the same time, the ECB does not need to go nearly as far as the Fed, which has raised interest rates in increments of 25 basis points at 12 consecutive meetings, with still more to come.