Even if it is stagflation, the ECB cannot choose to not react

The euro zone is going to face a situation of high inflation combined with weak or possibly negative growth if Russia stops its natural gas exports to Europe. This situation of stagflation (and it would surely be stagflation; we debunk a few incorrect arguments) is the worst-case scenario for a central bank. But the ECB will not be able to choose to not react to inflation: this would result in a compounding trend of rising prices, as companies would pass on their costs to their prices, wages would become more closely indexed to prices if inflation became permanent and the euro would depreciate, adding further to inflation, as the Federal Reserve is pursuing an active anti-inflation policy. Whatever the economic and social cost of the policy to get on top of inflation, it must be implemented.