The cut in world oil prices could help growth in the eurozone (photo: dpa)

Cheap oil and weak euro could drive Europe’s growth

Fears about inflation throughout the eurozone seem to have lifted. This can be both good and bad news. Cut-price oil and a weak euro could drive growth in the eurozone but the key to sustained growth will not be found in Quantitative Easing. In fact, troubled eurozone countries remain in need of substantial reforms.

<i>The European Central Bank seems focussed on showering commercial banks with new money. But Quantitative Easing will not fix all the problems over the next 18 months. These are rooted in a lack of structural reform and growth. Eurozone prices have dropped 0.6 per cent in the last 12 months and signs are that prices will remain stable. </i>


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Professor Enrico Colombatto
New liquidity will not finance new entrepreneurial activities over the next few months, but will bail out troubled companies which believed that indebtedness would allow them to resist competitive pressure, and inflation would help them settle the accounts with their creditors
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