If inflation spontaneously rises above 2% in the medium term in the euro zone, it will be very difficult to combat

Euro-zone inflation is likely to remain higher than 2% (its 2002-2007 level) in the medium term due to: The costs of the energy transition; Industrial reshoring costs; Declin in g productivity; Lasting labour market tightness. Excessive inflation in the euro zone could be combated by a restrictive fiscal policy, which would push up unemployment. But such a policy is very difficult to implement today, due to the need for healthcare, education, defence, energy transition, etc. This leaves the option of fighting inflation in the euro zone with a restrictive monetary policy. But a restrictive monetary policy is not very effective in fight ing inflation, since it mainly affects a single component of demand, namely housing investment. If fiscal policy cannot be used in the euro zone to fight inflation because of the massive need for public spending, and if the ECB's monetary policy is not very effective in fighting inflation, and if, moreover, a very restrictive monetary policy is no longer accepted because of the effects of high debt levels, the conclusion is that the ECB will be unable to bring euro - zone inflation down to 2%.