The European Central Bank is reacting too late and too timidly

Is it Christine Lagarde’s fault that she may soon have to choose between recession and a determined fight against inflation? Or worse, that it may have to choose between saving the euro and fighting inflation with determination?

“Guilt” is a big word, but the President of the European Central Bank certainly bears some of the responsibility. Because she provocatively classified inflation rates as “temporary” long after most economists had realized that inflation was here to stay. Because she refused for a long time to do anything against this quite foreseeable development.

Now Lagarde has initiated the long-overdue turnaround: a small rate hike of a quarter percentage point in June, followed by a further, possibly larger step in September. The end of bond purchases under the APP program, with expiring bonds in the portfolio still being bought for the time being.