In his Aug. 22 Jackson Hole, Wyo. speech, European Central Bank President Mario Draghi talked about the double-whammy that hit the eurozone: the global financial crisis (2008-2011) and the sovereign debt crisis (2011 - ).
He says the one-two punch is the main reason that European Union unemployment remains doggedly persistent.
Draghi also said, "Inflation has been on a downward path from around 2.5% in the summer of 2012 to 0.4% most recently."
Economist Paul Krugman wrote about Draghi's speech in an Aug. 23 New York Times opinion piece titled, "Draghi at Deflation Gulch":
I don't think I'm projecting too much in reading his Jackson Hole speech as the words of a man who knows perfectly well how dire the situation is, and is sailing as close to the wind as he can, but is all too aware of how inadequate that's likely to be. ....
The confidence fairy has vanished from official ECB rhetoric. So has the ECB's trigger-happiness when it comes to any hint of inflation:
The risks of "doing too little" – i.e. that cyclical unemployment becomes structural – outweigh those of "doing too much" – that is, excessive upward wage and price pressures.
The trouble is, what can he do about it?
You can read the entire article, which contains a link to ECB President Mario Draghi's speech, at the web address below.http://krugman.blogs.nytimes.com/2014/08/23/draghi-at-deflation-gulch/?_php=true&_type=blogs&_r=0