It’s too late for Germany to save the Eurozone
Duncan Richardson, News Editor
24 Oct 2014, 10:45 a.m.
Rating agency Standard & Poor’s believes it’s too late for a German stimulus package to save the Eurozone economy.
The Eurozone economy is suffering from a cocktail of low inflation, low growth and high levels of unemployment. In such an environment it’s difficult to know how governments can stop the ever increasing debt burden.
The European Central Bank (ECB) is using all the ammunition it has available stop the Eurozone falling into a deflationary spiral despite a number of stimulus packages, the ECB has failed to spark any expectation that inflation is set to increase.
With the outlook remaining bleak many are calling for the ECB to expand its balance sheet, create new currency units and directly purchase sovereign debt. Analysts now suggest if a QE program is not adopted soon deflation will take hold of the Eurozone. Pressure on the ECB is growing, how they will act still remains uncertain?
Some within the 18 member Eurozone are calling for Germany to act alone, but Standard & Poor’s believe such action is too little too late and the effect would be minimal. With the Eurozone being the UK’s largest trading partner any further slowdown will have a detrimental effect on our own economy.
If the ECB do commence a QE program it should boost the gold and silve price