How to reconcile short-term economic stabilisation with the implementation of the policies needed for the medium term?

We look at the examples of the United States, the euro zone and France. The first question that arises today is how to stabilise economies in the short term: there is a desire to rapidly reduce inflation (for example to avoid having to index all incomes to inflation and thus create highly unstable economies) and to stem the fall in household purchasing power by increasing public transfers to households. But a second question concerns the compatibility between stabilising economies in the short term and implementing the necessary policies for the medium term. There are medium- and long-term needs to invest hugely in order to succeed with the energy transition and to spend more public money on education, healthcare, defence and reindustrialisation . There is a clear potential conflict between these short- and long-term objectives: a sharp rise in interest rates to combat inflation would make it difficult to finance investments in the energy transition when they have low financial returns; very high fiscal deficits reduce governments’ ability to increase necessary and efficient public spending in the future. The most efficient solution is certainly not to abandon the long-term objectives or to defer the necessary short-term policies. It is probably to achieve the short-term objectives as quickly as possible, so that once inflation is reduced and therefore the purchasing power problem is much less acute, policy can fully address the long-term problems. This calls for the swift use of a highly restrictive monetary policy to rapidly stamp out inflation.