Deflation Isn't What's Holding Europe Back

The European countries that have experienced deflation this year have seen positive economic growth and increases in consumer spending.

Plenty of holiday shoppers here in France.

Photographer: Stephane De Sakutin/AFP/Getty Images

As the European Central Bank gets ready for quantitative easing, overriding German arguments that buying government debt creates moral hazard in debt-laden countries, it is reacting to the threat of deflation. Yet slow-growing prices aren’t at the heart of what ails the euro area, and QE won’t fix the deeper problems that are.

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