French Prime Minister: European Central Bank "Powerless" to Fend Off Deflation

French Prime Minister Manuel Valls sees a real risk of deflation for the eurozone.

He recently described the European Central Bank's economic policies as ineffective and said that unemployment "has reached an intolerable level."

Eurozone policies had not delivered economic rewards and there was a real risk of deflation in the face of lower-than-expected growth and low inflation, Valls told a seminar at the Elysee presidential palace.

--, Aug. 1

The article mentions that Valls has plenty to worry about just in his own country. The French economy continues to struggle even after "colossal efforts" to get it moving forward.

Key indicators for the French economy -- the second-biggest in the zone -- suggest that it is lagging behind the recovery of other leading economies in the European Union, and notably the powerhouse Germany. ...

A closely watched survey showed that the euro zone economy showed signs of a rebound in July but France was a notable exception.

The private Markit research group said according to its leading indicators -- the purchasing managers’ index (PMI) - turned in a figure of 54, above the 50-point signalling growth or downturn, up from 52.8 in June.

But the French economy showed further signs of slowing with an index reading of 49.4.

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