Last year, after inflation in the euro zone had slipped to 0.7 percent, the European Central Bank surprised many by cutting rates to a record low.
This week, despite an even steeper fall in consumer prices growth, it decided instead to offer no new aid to the euro area’s fragile recovery.
This frailty is often cited when looking at the huge differences between major eurozone countries’ economies. Recently, Italy suffered another setback reaching a new all-time unemployment record. Germany’s labour market figures, on the other hand, keep getting better and better.
In France, the rising jobless statistics were among the factors that just cost president Hollande a scorching defeat at the polls. A reshuffled government has now been appointed to reverse the trend. And, from now on, the task of reviving the country’s economy will become a two-man job.
On the other side of the world, Japan has been trying to put the sparkle back into its economy for some time now. The government has tried many rounds of stimulus but, with public debt skyrocketing, it has been forced to introduce a VAT increase for the first time in 17 years.
That is all in this week’s edition of Business Weekly.