Writing for the German daily Fez, economic editor Markus Frühauf warned the EU central bank is losing the opportunity to address rising inflation levels because southern European states in the bloc cannot afford to stop rising interest rates.
Mr Fruhauf argued all other central banks in the world are already ahead of the curve when it comes to find a solution to inflation concerns.
“Except the ECB, because it has to take the situation in southern Europe into account”, he wrote.
As inflation is pushing the cost of petrol to record-high levels across the world, Mr Fruhauf added: “Whether the inflation is only temporary or lasting, this discussion does not matter to drivers.
“They can see the inflation and thus the devaluation every day by looking at the petrol station prices.
“A litre of diesel costs more than ever before, and the price of gasoline is on the verge of a record.
“Together with the increased prices for gas and heating oil, it quickly becomes clear: The surge in inflation is affecting the broader population.
“All major central banks except EC) now have an advantage because they do not have to take into account the different economic policy interests in the countries of a monetary union.
“The US Fed or the Bank of England can now start tightening their monetary policy in order to contain inflation worries. The ECB, on the other hand, continues to hope for a temporary effect that will soon subside.
“But should that not be the case, as the rising commodity prices are suggesting, the ECB is risking its credibility in the fight for monetary stability.
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But ECB policymaker Olli Rehn, also Finland’s central bank governor, said that if elevated inflation lasts much longer, it could have a more significant impact on inflation expectations.
Investors will also watch several speakers from the Bank of England and the US Federal Reserve later in the session, as moves in euro area bonds have been largely driven by their respective bond markets.
In the primary market, Finland raised 941 million euros from the re-opening of a 10-year bond at auction.
Additional reporting by Monika Pallenberg