SAVE TO THE ECONOMIC RECOVERY OF THE UE: LOWER THE TYPES OF INTEREST AND DEVALUATE THE EURO

 

The situations that are happened in the time are not always the same ones, not even in the economy. That in their moment the BCE has as main objective to maintain the inflation in the Europa of the euro, era a necessity to avoid that a new economy, without history then, can bolt. This objective, the BCE has maintained it strong although the inflation went falling below the objective we remember "near to 2% ".  

This operability maintained during every year and in spite of the decadence of many European economies, it has gotten a contradictory effect and very dangerous today, this euro so stable had filled from uncertainty to many of the European economies that have not been able to manage their crises, and that one runs the risk that they have become in irreversible, because those economies cannot accommodate their strategic necessity to devaluate their products to make them more competitive, and this way to cause a certain recovery of their local economy, because they are valued and bundles to an euro immovable. The BCE has made very well of bank, but he has not made anything on the regulation of the general economy of the euro area.  

I mean with it that the BCE is guilty of the long crisis of the CE. that depends on the side since he looks at himself, I believe that it has not been directly it, the BCE doesn't cause the crisis, but I also believe that he didn't make anything to avoid it or at least to brake it, maybe because its limited autonomy never allowed it to him. The BCE has been limited to even safeguard the Euro to coast that many countries have been to a step of to perish squashed by its excessive valuation very above the real economies of those countries, and it is still very debatable today that some economies can leave this crisis having to finance its debt in Eurus. 

If the BCE doesn't decide to clip the types, and to show indications of its politics’ next relaxation, the investors could react negatively. A cutting of a point room to 0,25% would have a scarce economic impact, but it would be considered a sign. The BCE has always made elegance of its fight credentials against the inflation, but it is that he has abused so much that today there are not many economies that can touch the deflation, a deflation taken place by the offer abundance, but for just the opposite for impossibility of the economies to be able to bought and to sell and to get in debt with a foreign currency very above its production capacity and productivity.  

The consequence of this is that the investors doubt that the CE has the capacity to tolerate such a low inflation index on the whole. Although members of the BCE have noticed that the inflation in 2014 it could be located in 1,3%, Draghi has not wanted to respond to the questions about the risks of a too low inflation level or even of deflation, that that undoubtedly, it would take to deepen of the economic crisis. The deflation partly of the euro area, it would take to this to some imbalances I believe me every time but insolvable, the economies in deflation could not grow to an appropriate rhythm to improve unemployment, neither to reduce their debt percentages on their GDP, what would cause a tendency to surpass deficits objectives for simply to be able to pay the cost of their own currency. 

The fact of inflation of October, very inferior of what the economists waited, it supposes a true challenge. The inflation of the euro zone is right now very below that of Japan. Greece has had a negative inflation from March; Spain has been added to the club and Italy goes on the way to arriving at 0. As consequence of it the consumption expectations have begun to fall. That makes that the adjustment in these countries is more difficult, since a low inflation level inhibits the reduction of the debt, but the maintenance or almost constant revaluation of the euro could even be a threat for the economies that depend on the exports.  

If the deflation expectations grow, and he stays the German to maintain a strong euro that alone it has served to their economy, a deterioration of the fragile recovery of the internal demand that seemed to have begun its road could take place. The euro in short could experience a strong ascent, increasing the bear pressure on the inflation. Draghi exposed that the low inflation is not, for itself, bad. “More things" can be bought, he added. But he forgets that this alone it is true in the economies that can take place and to market products that are blindfolded in Eurus, because those that to buy more, they should buy Eurus in the debt markets, these they leave to the most absolute ruin, and now that the inflation seems dangerously low, the risks overcome on the whole to the benefits for the euro zone.