As the eurozone enters a vulnerable state once again, Patrick Artus, Chief Economist for Natixis, explains how low oil prices and the prospect of QE will keep Europe from entering another crisis in the short term. In the long term, however, once these stabilising mechanisms have disappeared, the crisis still looms. Indeed, we need to assess what will happen when oil prices rise again and the temporary boost to the economy begins to diminish – and we need to assess what will happen when the ECB is forced to stop its expansionary policies due to drawbacks such as excess liquidity, and the distortion of asset prices. It seems that the bête noire of the eurozone still remains on the horizon.
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