Stagflation Repeat of 1970s Seen by Issing as ECB’s Biggest Risk
- Ex-Bundesbanker expects ‘robust recovery’ as war impact fades
- But if stagflation takes hold, that’s the ‘worst combination’
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While the euro zone should enjoy a robust recovery when the shock of war dissipates, a stagflation scenario is the biggest risk to that view, former European Central Bank official Otmar Issing said.
The one-time Bundesbanker and long-time critic of loose monetary policy in the region gave his warning on Bloomberg Television hours before the Governing Council is due to give its initial collective response to the economic consequences of the conflict in its neighborhood.