Trichet Bypasses Growth Mandate as ECB Responds to Inflation

Jean-Claude Trichet is bypassing the European Central Bank’s little-known secondary mandate as inflation propels policy makers toward the first interest-rate increase in three years.

While the ECB president signaled on March 3 that he may have no choice other than to tighten monetary policy, the bank’s statutes hand officials leeway to pursue policies supporting economic growth. The Maastricht Treaty says the central bank can keep rates low if policy makers judge that price stability is guaranteed. The ECB itself forecasts inflation will slow below its 2 percent ceiling next year.