Wednesday, March 26, 2014

The euro zone

The euro zone faces a low but real risk of deflation that may force the European Central Bank to act, ECB board member Luis Maria Linde said Wednesday.
"If you ask me, the risk of inflation is low, but it isn't zero," Mr. Linde said at a business event. "There certainly is a chance that we see deflation."
Mr. Linde, who heads Spain's central bank, said the ECB stands ready and must be able to take measures to avoid a deflationary trend. His comments come after other ECB officials Tuesday sent strong signals that they are willing to consider dramatic steps to guard against dangerously low inflation. Earlier Wednesday, Slovakia's central bank Governor Josef Makuch said the ECB was ready to combat the specter of declining prices which, he said, threatens to undermine the euro zone's recovery.