Trying to keep a financial system and a currency union from collapsing upon each other.

To the ECB’s barely contained glee, inflation is back, alive, kicking and biting, in the Eurozone. In February, for the first time in four years, the region-wide 12-month inflation rate reached 2%.

Mario Draghi is thrilled to bits. After five years of driving interest rates to ungodly low levels, offering billions of euros of virtually free loans to Europe’s biggest banks, and scooping up tens of billions of euros per month of government and private-sector bonds and stuffing them onto the ECB’s balance sheet, which now holds €3.7 trillion of financial assets, he has finally achieved his dream of stoking official inflation back above 2%.

Now that it’s achieved its inflation mandate, Draghi’s ECB is facing increasing calls to finally begin tempering its monetary stimulus program, with a pre-electoral Germany predictably leading the way.

“It would probably be right if the ECB starts daring to head for the exit this year,” Germany’s Finance Minister Wolfgang Schäuble told the Sueddeutsche Zeitung newspaper (emphasis added). That was in January, when inflation in Germany was still below the 2% mark. Now it’s at 2.2%, its highest rate since August 2012.

In Germany inflation matters a great deal, for two main reasons. First, it is a nation of savers and renters. If inflation rises, so, too, do rents while the purchasing power of the people’s savings falls. And if wages cannot rise as fast as inflation, purchasing power of those wages also shrinks…

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