Trichet Didn't Get the Memo

European Central Bank President Jean-Claude Trichet apparently didn't get the memo that Jacques Chirac wants his monetary autonomy back so he can get back to the business of competitive devaluation, otherwise France won't be getting back to business. The ECB honcho made some hawkish statements about inflation on Thursday, indicating that the central bank would be prepared to raise interest rates. This gave the Euro a double shot in the arm and you could just hear the "Merde!" emanating from Elysee Palace.

I wonder if this is shaping up to be a classic head to head battle between economics, embodied in an inflation-fighting Central Bank, and politics, embodied in a despreate mercantilist head of state clinging to power. Usually, when the central bank and the politician are from the same government, it tends to work out bad for economics, but given that this is a fight between a supra-national body and powerful member state, it should be interesting.