After a period of ill-advised fiscal austerity imposed on her peripheral countries with balance of payments deficits during the Eurozone crisis (2010-2012), the EMU is characterized by a worryingly long and uniform period of fiscal and monetary expansion, i.e. it has gone to the other extreme in response to various exogenous and endogenous shocks that have hit it in the meanwhile. In this paper, we advocate the hypothesis that inflation, when it finally appeared (and seemingly out of the blue), appears a legitimate and inevitable consequence of irresponsible fiscal policy and unsustainably high public (and private) debts within the EMU, as well as that the recently undertaken reform of monetary policy ends up being at least insufficient and in some cases flat-out wrong reaction of economic policy makers. After all, the non-monetary context is to be held responsible for the fact that under the guidance of the same ECB, different members exposed very different inflation rates and reflation drivers, thereby making the fight against stagflation even more complicated. In accordance with the recently reaffirmed fiscal theory of the price level, it is impossible to defeat inflation if the restrictiveness of the central bank is not preceded by the fiscal policy even more zealously, while in the case of more seriously loosened inflationary expectations, one must also resort to freezing of prices and wages, which is but an additional indication that the stabilization ball isn’t necessarily in the monetary yard.

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