Davos chiefs say inflation ‘price to pay’ for defending values in face of Putin’s invasion

Inflation 'is a worldwide problem' says Lucy Frazer

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In the UK on Wednesday (May 24), inflation stood at a 40-year high of 9 percent, with officials warning it could spike yet higher. The massive rise in the cost of living has been blamed on multiple factors, including the war in Ukraine. Now François Villeroy de Galhau, governor of the Bank of France, said the spike in global inflation is a “price to pay” for defending Ukraine against Russia’s “special military operation”.

Speaking at the opening of the World Economic Forum (WEF) in Davos, Mr de Galhau said the forum’s objective is “to reduce inflation to 2 percent by 2024”.

However, he also said: “Since the first day of the invasion of Ukraine, Europeans and democracies in general have made a courageous economic choice.

“We knew that this would mean less growth, more inflation, but in a way, this is the price we have to pay to defend our values, to defend Ukraine and its freedom.

“There was also a call for help, already in the very short term, on the financial situation of Ukraine.

“I participated last week in a G7 meeting in Germany and the sum of 19billion euros to help Ukraine has already been raised, which is more than what was hoped for.

“I believe this is a case where, in favour of democracy, solidarity and peace, we accept to pay an economic price.”

In response to Mr de Galhau, Member of the National Assembly (RN) Nicolas Meizonnet said on Twitter: “It’s always easier to say these things when you earn 35,000€ per month like this governor of the Bank of France, than when you earn 1,400€ and you are a cashier in a supermarket.

“The arrogance of some high officials is unbearable.”

Florian Philippot, President of Les Patriotes, also said: “’The inflation caused by the conflict in Ukraine is the price we have to pay to defend our values,’ the governor of the Bank of France just said in Davos!

“Easy to say when, like him, you earn 23,600 euros a month, isn’t it?”

As of 2016, according to Bloomberg, French Central Bank Governor’s earn €300,000 a year (£256,853.45).

German Vice Chancellor Robert Habeck, speaking at the WEF forum, painted a darker picture of the global economic situation, saying multiple threats must be tackled to ease inflation.

He said: “We have at least four crises, which are interwoven. We have high inflation … we have an energy crisis… we have food poverty, and we have a climate crisis.

“And we can’t solve the problems if we concentrate on only one of the crises. But if none of the problems are solved, I’m really afraid we’re running into a global recession with tremendous effect .. on global stability.”


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Boris Johnson, meanwhile, reportedly told the Cabinet the Government must show it is working to bring down inflation.

According to the i, the Prime Minister is not planning to unveil policies to deal with inflation, amid the fallout from Sue Gray’s report into Partygate.

Kent Online reported Mr Johnson told Cabinet ministers unemployment stands at 3.7 percent and is at its lowest since 1974, as well as joking that the figure had never been lower in Chancellor Rishi Sunak’s lifetime.

He also reportedly said: “But, of course, the pressure on jobs, the shortage of labour, is also another inflationary pressure.

“And we’ve got to make sure that we are skilling people up. And it’s absolutely crucial that we do that.”

US President Joe Biden has also recently warned Americans worried about high inflation that it is “going to be a haul” before they feel relief.

Speaking to a news conference in Akasaka Palace in Tokyo, Japan on Monday alongside Prime Minister Kishida Fumio, Mr Biden denied the US is headed for a recession.

However, the President acknowledged issues with the US economy, and pointed to issues with food and oil shortages being due to Russian sanctions and the Ukraine war.

He then added: “We’re finding ourselves in a position where we’re working very hard with American farmers and American manufacturing- — and American agricultural products to provide more fertilizer and a whole range of things.

“This is going to be a haul. This is going to take some time. But in the meantime, it seems to me the best thing I can do — in addition to try to get the Middle Eastern countries, including OPEC, to raise their production of oil and move along that route — is to see to it that we continue to grow our economy, create jobs.”

Additional reporting by Maria Ortega

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