Summary of Europe already has one foot in 'Japanese' deflation grave
In The Telegraph of October 23, 2013, Ambrose Evans-Pritchard warns against deflation.
Over the last three months, inflation has dropped in several EU countries, leading the eurozone towards a Japanese-style deflation. Such sustained deflation is destructive to economies since debt dynamics are sensitive to changes in inflation. The current development risks pushing Italy and Spain into runaway debt.
Europe’s debt crisis strategy forces indebted states to cut wages to be able to compete with Germany. However, Europe’s policy regime does this without stimulating economic growth. Despite economy measures, the debts of Italy, Spain, Portugal and Ireland have risen over the past two years. Private debts have also risen since the crisis began and businesses had to spend their liquid assets. Thus, imposing fiscal cuts is a self-defeating policy.
The solution to this economic climate is an inflation of at least two percent. However, the ECB is doing nothing to ensure this, as it is biased towards Germany, which is against inflation due to its strong economy.
The author recommends that the countries in need of inflation cooperate in the ECB’s governing council. They should assert themselves and call Germany’s bluff of walking out of the eurozone.My comment:
Apart from the highlighted word (economic instead of economy), I can not see anything wrong with this summary; it is grammatically as well as textually well-written. The student:
- seems to have understood the main points of the text,
- wrote a good and concise introduction and conclusion,
- avoided redundancy,
- used a good range of vocabulary,
- stuck to the facts and remained impersonal,
- and was consistent register-wise.
