Before
The
article „Europe has one foot in 'Japanese'
deflation grave” published on the 23th of October in “The
Telegraph” and written by Ambrose Evans-Pritchard, outlines the
European deflation crisis. It explains that Europe is slipping
towards the deflation problem Japan is in right now. France, Italy,
Spain and other European countries are in the beginnings of a
deflation crisis already while some rich European countries like
Germany seem still unaffected. Yet inflation is too low and dropping
towards zero percent throughout Europe. Deflation can cause extremely
dangerous runaway debt which countries have no chance of ever paying
back. One possible solution for this problem is raising the inflation
rate but yet unaffected countries like Germany are not in favor of
this proposal. The author then suggests that France, Italy, Spain and
Club Med allies should force Germany to implement reflation policies
because this seems to be the desperately needed solution. Instead of
changing policies, however, Europe is doing nothing to escape the
disaster. They hope for global growth to save them, even though this
is far from secure. To conclude, Europe is far from safe from a
serious financial crisis and is doing nothing to stop it.
After
The
article "Europe has one foot in 'Japanese'
deflation grave" published on the 23th of October in "The
Telegraph" and written by Ambrose Evans-Pritchard, outlines the
European deflation crisis.
It explains that Europe is slipping towards the deflation problem Japan is currently in. France, Italy, Spain and other European countries are in the beginnings of a deflation crisis already while some rich European countries like Germany seem still unaffected. Yet inflation is too low and dropping towards zero percent throughout Europe.
Deflation can cause extremely dangerous runaway debt which countries have no chance of ever paying back. One possible solution for this problem is raising the inflation rate but yet unaffected countries like Germany are not in favor of this proposal.
The author then suggests that France, Italy, Spain and Club Med allies should force Germany to implement reflation policies because this seems to be the desperately needed solution. Instead of changing policies, however, Europe is doing nothing to escape the disaster. They hope for global growth to save them, even though this is far from secure.
To conclude, Europe is far from safe from a serious financial crisis and is doing nothing to stop it.
It explains that Europe is slipping towards the deflation problem Japan is currently in. France, Italy, Spain and other European countries are in the beginnings of a deflation crisis already while some rich European countries like Germany seem still unaffected. Yet inflation is too low and dropping towards zero percent throughout Europe.
Deflation can cause extremely dangerous runaway debt which countries have no chance of ever paying back. One possible solution for this problem is raising the inflation rate but yet unaffected countries like Germany are not in favor of this proposal.
The author then suggests that France, Italy, Spain and Club Med allies should force Germany to implement reflation policies because this seems to be the desperately needed solution. Instead of changing policies, however, Europe is doing nothing to escape the disaster. They hope for global growth to save them, even though this is far from secure.
To conclude, Europe is far from safe from a serious financial crisis and is doing nothing to stop it.
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