Jean-Claude Trichet has a new headache. The European Central Bank (ECB) president has been fighting fires all over the continent as a debt crisis loomed—Greece was just the beginning. And now a glass of beer may give him a bad hangover.
Research from UniCredit this week details the economics of Oktoberfest, the beer party running over more than two weeks in southern Germany. Six million guests, with a billion euros to spend, are going to find that the cost of two litres of beer, some grilled chicken and transport is 3.4% more than last year. How do you say “inflation” in German?
Trichet, whose ECB targets inflation under 2%, has to be squirming. He’s kept monetary policy loose so far to treat Europe’s financial headaches.
But the pain could get worse if he doesn’t tighten up. No ordinary German, given his nation’s history, likes inflation. And no ordinary office-goer, simply looking for a drink after work, wants his pint to pinch his wallet.