The European Economy: How Bad Is It?
11:11 AM, Jun 5, 2014 • By GEOFFREY NORMAN
So bad that, as the New York Times reports:
The European Central Bank cut its benchmark interest rate to a record low on Thursday and, in an unprecedented attempt to stimulate the euro zone economy, said it would begin charging interest on deposits held by the bank.The so-called negative deposit rate has never been tried on such a large scale and is a bid to push down the value of the euro and encourage banks to invest excess cash rather than hoarding it in central bank vaults.
There was a time when it seemed that the one thing governments could do, almost without trying, was inflate the currency. Now, even that seems difficult.And so, the great contraction continues.
Recent Blog Posts