9 of the population active compared with 7

On March 3, the Board of Governors of the ECB decided to leave unchanged interest rates directors of the euro area, set at 1 since May 2009. But, in his press conference, Jean-Claude Trichet very clearly expressed his concern facing the inflationary pressures related to higher prices of raw materials (increase in the consumer price of 2.4 in January, compared with 2.3 in December). By insisting on the vigilance of the ECB, it developed markets and banks higher future and progressive rates, which could reach, according to many commentators, 1.75 end 2011. This is a high risk monetary strategy which faces numerous objections, both because it is doubtful that the rising prices of raw materials could exercise lasting contagion effects, and because the recovery remains fragile.

Consider an increase in rates in April returned to mechanically apply an inappropriate monetary doctrine in 2011. For the ECB, the prices of petroleum products and raw materials could cause a jump in inflation expectations and produce the famous second-round effects if businesses accept the wage claims and impact on prices. But it is not at all in the scenario in which there had been at the previous oil boom in 2007-2008, which was actually translated by an acceleration of inflation in the eurozone (3.3 in 2008). The economic growth of the area remains low ( 0.3 quarterly slipped to third and fourth quarters 2010). The unemployment rate improved slightly in 2010, but it still reached 9.9 of the population active, compared with 7.5 per cent before the crisis. If the rate of inflation has actually accelerated since December, underlying inflation, excluding oil prices and food products, has never been as low, since the creation of the euro, and is the only 1. At this time, costs drop wage real, in the euro area, and it is doubtful that an indexing process reappear at a time when concerns of economic agents are very bright, given the current budgetary adjustments and a near 10 unemployment rate. And then the unions have low bargaining power, which augurs poorly for a capacity to impose wage increases, in a context of globalization which weighs considerably on the wages of the readily. Finally, on a strictly monetary plan, the annual rate of growth of loans to households and businesses was above 10 in 2007-2008. Today, the loans to the private sector is progressing very moderately (in January, 3.1 for households) and 0.4 for non-financial corporations and growth of the money supply remains weak. It has even decreased in January ( 1.5, compared with 1.7 in December).

This announced increase of European rates would therefore respond in a difficult macroeconomic environment, as the rise in the price of energy has already induced amputation of the purchasing power of households. Add a monetary shock reduction of the fiscal stimulus and oil collection, while promoting a significant appreciation of the euro against the dollar, has all chances to exercise a procyclical effect at a very bad time. As the Fed has no intention to raise US rates. It will continue its non-conventional policy of liquidity, which again should weaken the dollar.

Monetary policy is a communication tool that reports where macroeconomic and tensions that are the priorities of the moment. In the euro area, current budgetary adjustments must therefore be accompanied by a pulse private demand. Will raise interest rates play exactly in the opposite direction, especially in a financial context, on the balance sheets of banks or debt of the States, which remains extremely worrying. It is a very bad signal that is likely to compromise yet very fragile European growth.