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Europe on brink of deflating, needs stimulus

[LONDON] The European economy is "on the brink of deflating" and urgently needs fiscal and monetary stimulus, former US Treasury secretary Larry Summers said on Tuesday.

Mr Summers said Germany must do more to revive the flagging eurozone economy, including more government spending and debt forgiveness for some of the currency bloc's more indebted members.

Addressing an audience at the London School of Economics, Mr Summers said central bank bond buying, known as quantitative easing, is better than no action at all but there is a limit to how much it can achieve in terms of stimulating growth.

REUTERS