> Euroland is closer to deflation than inflation, so I can only guess
> that the ECB wants to keep unemployment high to keep political
> pressure on for "reforms" - i.e., a more U.S.-style labor market,
> i.e., working harder for less.
They come very close to actually admitting it in their reports. Their usual formula is to explain that they *would* lower interest rates more if the labor market were more "flexible," but that under the circumstances it would only generate inflation - even though EU inflation is lower than it is in the US, where "flexibility" already exists.
Seth