Europe's Descent Into Deflation
Mario Draghi and the ECB must stimulate growth now
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For a while, it was debatable whether Europe’s economy was recovering. No longer. Its recovery has stopped. The question is whether stagnation will tip over into something worse.
There’s no growth in the euro region. France is stagnant, Italy is back in recession, and even the German economy, according to revised figures, shrank in the second quarter. Admittedly, that’s partly because of the effect of sanctions against Russia—but the economic drag from the crisis in Ukraine isn’t about to end soon. Conditions are increasingly aligned for deflation.