European slowdown Stagflation threatens

So far he’s been the only dog to bark. Repeatedly French President Nicolas Sarkozy has disturbed the peace of the European Central Bank, yapping that inflationary pressures “no longer exist” and the soaring euro is bad for European growth. It looks like barking Sarko was both wrong and right. Inflation has risen, vindicating the ECB’s hawkishness. But growth seems to be slowing. That’s a stagflationary combination which will trouble the ECB a good deal more than Sarko’s bark. A European slowdow...