Summary "Europe already has one foot in Japanese deflation grave" corrections

Ambrose Evans-Pritchard, (date is missing) the author of the article in The Telegraph, analyses the European deflation crisis and compares this situation to Japan's deflation failure that happened due to policy errors. Dept in Europe is on the increase and is becoming a serious threat to the European economy. Since the debt in western Europe rises faster than nominal GDP, these countries may face disastrous consequences. Deflation can cause dangerous runaway debt, which is already the case in Italy and Spain, and this debt is even more problematic to repay.

Policy errors throughout Europe are one of the main reasons why the prospect of solving the deflation problem seems very unlikely. One possible solution for this dilemma is proposed in the article, namely, to let inflation drift up in order to prevent deflation. However, countries which are not affected by this danger, such as Germany, are against this solution. Therefore, instead of establishing stable policies, Europe is drifting uncontrollably towards its deflation grave. The author then suggests that France, Italy, Spain and Club Med should ally and force Germany to enforce reflation policies. As they fear Germany's quitting, this solution is improbable to be implemented. Furthermore, the author suggests the economy recovering by itself, which is also an inappropriate solution.

[207 words]

With teacher's corrections:

Ambrose Evans-Pritchard, the author of the article published in The Telegraph on the 23th of October, analyses the European crisis and compares this situation to Japan's deflation failure that happened due to policy errors.  European debt is increasing and is threatening the European economy. Since the debt in western Europe rises faster than nominal GDP, these countries may face disastrous consequences. Deflation can cause extremely dangerous runaway debt, which is already the case in countries like Italy and Spain, and this debt is even more problematic to repay.

Policy errors throughout Europe are one of the main reasons why the prospect of solving the deflation problem seems very unlikely. One possible solution for this dilemma is proposed in the article, namely, to let inflation drift up in order to prevent deflation. However, countries like Germany are against this solution. Therefore, instead of establishing stable policies, Europe is drifting uncontrollably towards its deflation grave. The author then suggests that the Club Med should ally and force Germany to enforce reflation policies. As they fear Germany's exit, this solution is unlikely to be implemented. Furthermore, the author suggests may recover spontaneously, which is also an inappropriate solution.

[196 words]