There’s not many who would have touched Europe with a barge pole a few years ago yet now they can’t count the money coming in fast enough. European debt costs are falling, inflation is low, meaning real returns don’t get eaten into, and the EZ is unlikely to disappear into a fiery abyss anytime soon.
While deflation is a problem, if it happens, we should remember that low prices in the right areas can be good for growth. Manufacturers and producers will feel the benefit of low input prices enabling them to be more competitive and potentially increase margins. Consumers will pay less for utilities and staples. If the threat of deflation really starts to to get the ECB taking strong action then that will be the high value of the currency taken care of. There are as many positive outcomes to the current situation as there are negative but it’s up to Europe to make the most of it. If ever there was an opportunity for Europe to get back on its feet this could be it. The chances of them really grabbing the bull by the horns though? I’ll let history answer that one
A big opportunity for Europe?
