New Stimulus Plans of Eurozone Face Some Questions Regarding its Merits

New Stimulus Plans of Eurozone Face Some Questions Regarding its Merits

The eurozone is possibly facing its worst kind of stagnation for a while with a lot at stake. To make situations better its central bank is likely to announce its largest stimulus measure soon.

The sluggish growth in the eurozone is weighing on the zone as well as the global economy. The rate of unemployment still holds high at 11.5 percent. The fears of deflation are growing as the prices fall. The companies as well as the consumers are delaying their plans of spending hoping better bargain rates which is possibly taking a toll on the growth for some years. Among other big economies, Japan went into deflation in the 1990s, which it is still trying to overcome.

The stimulus at this juncture sounds to be a optimistic solution but some of the economists and policymakers in the nineteen member currency union are still upset.

They are doubtful about the merits as well as the dangers that will come with the new stimulus program as it may involve buying of large-scale government bond buying programmes.

The president of the European Central Bank, Mario Draghi, is already facing extraordinarily frank disagreement that is coming from some of his twenty five member board just before the meeting scheduled on January 22.

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