In March 2021, the ECB projected that inflation would be 2% at the end of the year. In reality, inflation was 5%.

I'm stunned that there isn't more backlash against this colossal failure. Especially because the ECB has been arguing that climate change falls within its mandate, because CC has an impact on inflation.

Now we have massive inflation, and the same central bankers say they can't do anything. Funny how that works.

After a rant, I make three suggestions on how the ECB can do better:

1) Set low interest rates on loans for projects that make the euro area less reliant on imported energy (e.g. building renovations, renewable energy...)

2) Incentivize the creation of good models of inflation with a prize.

3) Make the PSPP (public sector purchase programme, the ECB's sovereign bond buying program) conditional on how much governments reduce the dependence on imported energy.

Also a reminder that you can win 250 euro, if you share this Linkedin post and tag a friend :)

www.linkedin.com%2Fposts%2Fjan-musschoot-b9a4b327_our-2022-courses-activity-6881187659373412352-pw6n