SUK3 Part3 Before and After Summary Henry

BEFORE

Ambrose Evans-Pritchard, in The Telegraph of October 23, 2013, analyses the Europe’s deflation crisis and policy error.

The author believes if this policy error continues, Europe will be trapped in deflation as Japan is now. Besides, debt ratios in Europe are soaring up. Nevertheless, the EU authorities linger to deal with the problems. Deflation causes dramatic debt rise which is lethal once it exceeds 300pc. The situation is getting only worse.

Furthermore, the Europe’s debt crisis strategy is contradictory. The states suffering from deflation are coerced to ultra-austerity to offset lost competitiveness against Germany. The author considers such policy to be brutal, self-defeating and ineffective. 

To make things worse, deflation influences private debt even more; here not only debt shoots up, but liquid assets come into play, so that small firms could stay afloat.

Debt dynamics depends on inflation. According to Mr Darvas, the only way to escape the deflation grave is to let the inflation grow. The ECB should implement all possible measures to keep inflation rate at 2pc point at least. However, the ECB stays inactive.

The author sees the way out from deflation in the Club Med allies’ teaming up and forcing the reflation policy.

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AFTER

Ambrose Evans-Pritchard, in The Telegraph of October 23, 2013, analyses Europe’s deflation crisis and policy error.

The author believes if this policy error continues, Europe will be trapped in deflation as Japan is now. Besides, debt ratios in Europe are soaring. Nevertheless, the EU authorities delay dealing with the problems. The situation is getting worse.

Furthermore, the Europe’s debt crisis strategy is contradictory. The states suffering from deflation are coerced to ultra-austerity to offset lost competitiveness against Germany. The author considers such policy to be brutal, self-defeating and ineffective. To make things worse, deflation influences private debt even more; here not only debt shoots up, but liquid assets come into play, so that small firms could stay afloat.

Debt dynamics depends on inflation. The only way to escape the deflation grave is to let inflation grow. The ECB should implement all possible measures to keep the inflation rate at 2pc point at least. However, the ECB stays inactive.

The author sees the way out from deflation in the Club Med allies’ teaming up and forcing the reflation policy; but they are paralysed and afraid of Germany’s walking out and reverting to the D-Mark. Therefore, Europe is in a terrible plight.

200 WORDS NOT INCLUDING TITLE

I have corrected articles, combined two paragraphs and completed the last paragraph.