The European Central Bank will present new economic projections later this week which will almost certainly be worse than those published in March.
ECB board member Isabel Schnabel said last month that the energy shock has already “moved beyond the adverse scenario which assumed a rapid normalisation of oil prices.”
That means June’s inflation projections for this year will be higher than the 2.6 percent previously expected. And growth will be lower, probably close to the 0.9 percent currently estimated by the EU Commission.
The question is how Europe should respond.
An important clue about what route the EU intends to take came last week when the commission decided to relax debt and spending limits for energy-related investments by member states.
