Fundmanager Carmignac: deflation is closing in on Europe

‘The eurozone, and to a lesser extent the United States, today see that their entire financial systems are exposed to the powerful deflationary effect of debt reduction.’ On the euro debt crisis, Saint-Georges said that ‘the whole of Europe is today faced with exceptionally serious financial risks that call for adequately sized therapy treatment.’ He added that putting aside the possibility of a eurozone break up, 'it becomes unavoidable that cures that were once considered taboo must now be considered to halt this mortal contagion.’ ‘Especially concerning the European Central Bank which now has to be mandated to act decisively (zero interest rates, last resort lender, direct or indirect financing of the EFSF, among others) to ensure, like all central banks should, the stability of the financial sector.’ ‘The project of a form of obligatory financing plan, joint or united, in the eurozone can no longer be banished from the discussion table. The suicidal effect of excessive austerity measures must also be recognised.’ ‘Finally, a higher degree of budget integration must also come in the form of a solid plan.’

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