Why Europe is terrified of deflation

http://www.salon.com/2014/09/20/why_europe_is_terrified_of_deflation/



Leaders fear declining prices could lead to economic hard times unseen since the formation of the European Union

Why Europe is terrified of deflation
Paul Ames, GlobalPost
Saturday, Sep 20, 2014 02:00 PM EST

LISBON, Portugal — From Putin’s hordes massing over the eastern borders of Ukraine to the army of home-grown Islamic State fanatics threatening a murderous return from the Middle East, Europe has a lot be frightened of right now.

Yet there’s another nightmare haunting Europe’s economic policy makers: a monster called deflation that’s already clawing at the continent’s financial fundaments.

“We are meeting here at the time when Europe is facing a great threat,” Polish Finance Minister Mateusz Szczurek warned in a recent speech.

“We are on the verge of deflation,” he told a Sept. 4 conference in Brussels. “As Europeans we should never forget that it was depression and deflation … that brought to power the totalitarian regime that devastated our continent through the world war and unspeakable atrocities 75 years ago.”