Eurozone needs more monetary easing

WHILE the US economic recovery is gaining traction and Japan has at least beaten deflation and looks set for positive growth, Europe has emerged as the weakest major link in the global economy. Economic recovery there has stalled and even the largest economy on the continent, Germany, contracted in the second quarter. Inflation in the eurozone is running at a five-year low of 0.3 per cent and deflation is a real and present danger.

Thus all eyes will be on the European Central Bank (ECB), which is due to decide on interest rate policy at the meeting of its Governing Council tomorrow. Hope…