Germany’s central bank chief calls for measures to control rising inflation in euro area

By Gokhan Ergocun

ISTANBUL (AA) - The governor of Germany's central bank on Tuesday called for taking measures to cope with the rising inflation in the euro area.

Speaking at the International Economic Symposium in the Eltville am Rhein province, Joachim Nagel said if the incoming data and the bank's new projection signaled for an interest rate hike in June, he will "advocate a first step normalizing ECB interest rates in July."

Highlighting the Volcker disinflation in 1970s, Nagel said: "Over the course of this policy, nominal interest rates in the US rose above 20%."

He also said that the net purchases under the asset purchase program should end in June.

Noting that the global economy has recovered from a recession stemmed from the pandemic, he stressed that the world economy has risen strongly last year.

Touching on the Russia-Ukraine war, he said the inflation which was around 5% in the euro area last year reached 7.4% due to the war.

"According to preliminary releases, inflation continued to surge in April, reaching 7.5% in the euro area," he said, adding that these levels in inflation have not been seen since the 1981 Gulf War between Iraq and Iran.

"All in all, inflation risks are clearly tilted to the upside," the central bank governor said, adding: "History has taught us that turnarounds in inflation tendencies commonly occur when the authorities and economists are either not seeing the risks or denying them."